Fill in the blanks counted as correct): - The efficient quantity is market price is Choose the appropriate answers from A, B, C, D, E, F, G, and H (answers that do not use these letter options will not be ; however, without any remedies, the equilibrium market quantity is and - The total deadweight loss associated with the externality is shown in this graph by areas -If the government is successful in their externality correction endeavor, that would make the after-intervention market quantity equal to and the equilibrium

Fill in the blanks counted as correct): - The efficient quantity is market price is Choose the appropriate answers from A, B, C, D, E, F, G, and H (answers that do not use these letter options will not be ; however, without any remedies, the equilibrium market quantity is and - The total deadweight loss associated with the externality is shown in this graph by areas -If the government is successful in their externality correction endeavor, that would make the after-intervention market quantity equal to and the equilibrium

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Please solve for d) e) and f).
A medical vaccine is produced and sold in a perfectly competitive market. Assume that the medical vaccine generates a positive externality in consumption within the society. (a) Draw a properly labeled graph for a competitive market providing this medical vaccine and show each of the following. (i) The market equilibrium quantity, labeled QC (ii) The socially optimal quantity, labeled QS (iii) The area of the deadweight loss, shaded completely (b) Identify one policy action that would lead to the production of the socially optimal quantity of the vaccine. (c) Would a binding price ceiling result in the production of the socially optimal quantity of the vaccine? Explain.
Q2: From studying the following graph, we can say that: price P2 P1 Q1 E1 E2 MPC = MSC = S Q2 MSB = MPB + MEB MPB = D A- This graph represents a situation of a good or service that generates external cost. B- In this case, the government should intervene to encourage and increase production of these goods and services. C- Market equilibrium is determined at point E2, but efficiency condition is satisfied at E1. D- In this case, The Government should impose a corrective tax to reduce the produced quantity. E- None of the above. 38
Il) The figure below shows a market in which there is an externality. The curve S2 is parallel to S1. Areas in the figure are numbered. Price 60.00 49.60 40.80 2 8 le 27.60 5 19.2 32.4 Quantity s) What type of externality is shown in the figure and why is it a problem in economics? Identify the market equilibrium and the social equilibrium in the figure. If the market were to move from the market equilibrium to the social equilibrium, indicate the area(s) that represent the change in a. b. C. consumer surplus, the change in producer surplus, the change for third parties, and the net effect on total surplus. Does total surplus rise or fall? d. OWhat would be the amount of a per-unit tax needed to fix the externality?
What divergences arise between equilibrium output and efficient output when (a) negative externalities and (b) positive externalities are present? How might government correct these divergences? Cite an example (other than the text examples) of an external cost and an external benefit.
Use the following diagram of the market for product X to answer the question below. Price Q₁ Qo Q₂ Quantity D₁ Curve S, embodies all costs (including externalities) and D, embodies all benefits (including externalities) associated with the production and consumption of X. Assuming the market equilibrium output is Q₁, we can conclude that the existence of external A) costs has resulted in an underallocation of resources to X. B) costs has resulted in an overallocation of resources to X. C) benefits has resulted in an overallocation of resources to X. D) benefits has resulted in an underallocation of resources to X.
Consider a market with the following supply and demand. (It may help to draw a graph for these questions.) P 5 6 7 8 9 10 11 12 13 14 QS 200 300 400 500 600 700 800 900 1000 1100 QD 800 750 700 650 600 550 500 450 400 350 If there is an external cost of $3, what is the efficient quantity? 500 (already answer) If there is an external benefit of $3, what is the efficient quantity? 700 (already answer) For the remaining questions assume that there is a $3 external COST. If the government wants to get the efficient quantity with a per/unit tax, how much should the tax be? 3 (already answer) Now imagine that they use tradable allowances. If they cap the quantity at 400 what would the value of these allowance be in the market? (Assume the…
The supply and demand conditions facing a firm that makes widgets and generates a negative externality by dumping a highly toxic sludge in a nearby river is given in the table below. Price Quantity Demanded Quantity Supplied without Paying Social Costs Quantity Supplied after Paying Social Costs 100 0 120 75 80 10 100 50 55 30 90 30 40 55 85 25 30 80 80 20 20 100 65 15 The equilibrium price and quantity when social costs are taken into account are Question 12 options: Price = $55, Quantity = 30 Price = $40, Quantity = 55 Price = $30, Quantity = 20 Price = $30, Quantity = 80
sub= 24 help
Given extremely high rates of obesity, diabetes and cancer, should the U.S. Government implement or increase previously established sin taxes on soda, junk foods, cigarettes and alcohol? Provide a justification for your response. Discuss this in the context of the economic concept of externalities
Please only solve these following ones if it is hard to explain the reasons. 1) External cost, external benefit or neither?2) Recommend Taxing or Subsidizing?
61) The Coase Theorem points out that externality problems can be eliminated if the number of parties involved is small and if property rights A) are granted solely to consumers. B) are granted solely to producers. C) are eliminated. D) are granted to either consumers or producers and transactions costs are low. 62) The Coase Theorem says that which of the following is necessary to lead to an efficient use of resources? A) presence of transaction costs B) existence of property rights C) government intervention D) All of the above answers are correct. 63) According to the Coase theorem, which of the following are necessary for the efficient levels of pollution to be achieved? I.Property rights are defined. II.Transactions costs are low. A) I only B) II only C) both I and II D) neither I nor II 64) Which condition(s) must exist for the Coase Theorem to hold? I.Property rights must exist. II.Transactions costs must be measurable. III.A small…