Externalization is tacit to explicit knowledge, through which the knowledge is made explicit and codified in some persistent form. O True O False
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- Why are externalities considered a sign of market failure?An externality can create a difference between costs/benefits and costs/benefits.Which of the following generate the type of externality previously described? Check all that apply. The city where you live has granted a permit to put a movie theater in your neighborhood, causing traffic jams at night and on weekends. A microbiology lab has published its breakthrough in swine flu research. Your roommate, Lucia, has bought a puppy that barks all day while you are trying to study economics. Eric has planted several trees in his backyard that increase the beauty of the neighborhood, especially during the fall foliage season.
- Which of the following are examples of negative externalities? Group of answer choices Your neighbor paints her house and upgrades the landscaping. An airport is constructed to support commerce and travel in your community Trash dumped upstream flows downstream right past your house.Externalities are only inefficient when they impose a cost. They are not inefficient when they bestow a benefit. Select one: True FalseThe market inverse supply curve for amoxicillin, an antibiotic with lots of generics, isrepresented by the equation P = 3 + 0.0006QS. The market demand curve is represented byQD = 187,500 − 625P.It is well known that antibiotic use generates negative externalities. How might thegovernment restrict the use of antibiotics? Show this on a demand-supply graph. Thendiscuss a potential unintended consequence of the government’s intervention.
- Why are taxes, one traditional remedy for negative externalities, less than ideal for smoking cessation in the United States? Nicotine is addictive/demand is inelastic, and smokers are mostly poor, so in effect cigarette taxes reduce the quality of life of people we’re trying to help without substantially reducing smoking Demand is inelastic, and smokers are mostly rich, so they don’t reduce smoking as a result of taxes Demand is elastic, and smokers are mostly old, so taxes reduce smoking but cause increased anxiety among the elderly Demand is elastic, and smokers are mostly young, so they quit smoking but are then more likely to experiment with illegal drugsHow does an externality indicate market failure?Refer to the figure below. This graph describes a good that: Price ($/unit) A B C-- I Social MC Private MC F Quantity (units/day) Demand