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- The cost (supply) of each "unit" of NPR (National Public Radio) is P=9. Derek's valuation for each unit of NPR (demand) is given by Pp=20-2Q, and Kim's valuation is given by Pk=10-Q. The social valuation of NPR is Ps= Q. The socially optimal amount of NPR is units. Without intervention, the private market would lead to an 수 of NPR. Suppose the government decides to subsidize NPR in order to achieve the socially optimal amount of NPR. The total demand function is Qr= The appropriate subsidy is $ (include 2 decimals) per unit of NPRIdentify at least one positive and negative externality from running a hamburger shop. What is one example of how an externality could affect the price of your hamburger?Due to harmful effect in smoking, the government would like to discourage smoking. Appraise the welfare effects of using price controls and taxes to discourage consumption of cigarettes. Explain your answers with suitable diagrams.
- With the aid of examples or illustrations, show how cost-benefit analysis is linked to the following two welfare economic theory ExternalitiesExercice 2: c 1. Can you give an example of a market that, according to Sandel, is likely to have a corrupting effect in the above sense? 2. Who worries more about the corrupting effects of markets: Sandel OR Jason Brennan and Peter Jaworski?A county government has decided that it needs to generate more revenue to pay for repaving all of the roads in the county. County officials have decided that the best way to generate more revenue is to raise the tax on restaurant meals. Explain whether this tax is likely to be effective at generating revenue for the county. Be sure to identify, define, and explain any Economic concepts you use in answering this question.
- Distinguish the true statements from the false statements. True False Market failure occurs when negative externalities are present but not when positive externalities are present. The government sometimes intervenes when a market failure occurs. Externalities are the only example of market failure. Market failure occurs when either negative or positive externalities are present. Market failure is when a market provision of a good result in an inefficient quanitity.Nobel Prize-winning economist Gary Becker suggested that prohibited drugs should be legalized and then taxed. This would the seller's cost and government revenue. a) increase; decrease b) decrease; increase c) increase; increase d) decrease; decreaseAn externality arises when a firm or person engages in an activity that affects the wellbeing of a third party, yet neither pays nor receives any compensation for that effect. If the impact on the third party is beneficial, it is called a externality. The following graph shows the demand and supply curves for a good with this type of externality. The dashed drop lines on the graph reflect the market equilibrium price and quantity for this good. Adjust one or both of the curves to reflect the presence of the externality. If the social cost of producing the good is not equal to the private cost, then you should drag the supply curve to reflect the social costs of producing the good; similarly, if the social value of producing the good is not equal to the private value, then you should drag the demand curve to reflect the social value of consuming the good. (?) PRICE (Dollars per unit) QUANTITY (Units) Supply Demand ¦ þ Demand Supply
- With this type of externality, in the absence of government intervention, the market equilibrium quantity produced will be than the socially optimal quantity. Which of the following generate the type of externality previously described? Check all that apply. Your roommate Crystal has bought a puppy that barks all day while you are trying to study economics. Tim has planted several trees in his backyard that increase the beauty of the neighborhood, especially during the fall foliage season. A microbiology lab has published its breakthrough in swine flu research. The local airport has doubled the number of runways, causing additional noise pollution for the surrounding residents.If there are no externalities a competitive market achieves economic efficiency. If there is a negative externality, economic efficiency will not be achieved because too much of the good will be produced. a deadweight loss will occur that is equal to the area under the demand curve for the good. too little of the good will be produced. economic surplus is maximized.e. What happens when government imposes a tax of 60 cents per gallon on buyers?
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