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International Agreements on Trade and the Environment a. In panel A, Home enjoys positive production externalities b. In panel B, Home enjoys positive consumption externalities associated with a particular good. Label the supply and social associated with a good. Label the demand and social marginal benefit curves on Panel B below. marginal cost curves on Panel A below. Panel A: Positive production externality Panel B: Positive consumption externality 20 SMC 20 D SMB 19 19 18 18 17 17 16 16 15 15 14 14 13 13 12 12 11 10 H. 7 2 D 0123 4 56789 10 11 12 13 14 15 16 17 18 19 20 Quantity 0 123 45 6789 10 11 12 13 14 15 16 17 18 19 20 Quantity c. Taking into account the social marginal costs (SMC), calculate the net change in welfare to Home from free trade. d. Taking into account the social marginal benefits (SMB), calculate the net change in welfare to Home from free trade. Net change in welfare: s Net change in welfare: $ Price

International Agreements on Trade and the Environment a. In panel A, Home enjoys positive production externalities b. In panel B, Home enjoys positive consumption externalities associated with a particular good. Label the supply and social associated with a good. Label the demand and social marginal benefit curves on Panel B below. marginal cost curves on Panel A below. Panel A: Positive production externality Panel B: Positive consumption externality 20 SMC 20 D SMB 19 19 18 18 17 17 16 16 15 15 14 14 13 13 12 12 11 10 H. 7 2 D 0123 4 56789 10 11 12 13 14 15 16 17 18 19 20 Quantity 0 123 45 6789 10 11 12 13 14 15 16 17 18 19 20 Quantity c. Taking into account the social marginal costs (SMC), calculate the net change in welfare to Home from free trade. d. Taking into account the social marginal benefits (SMB), calculate the net change in welfare to Home from free trade. Net change in welfare: s Net change in welfare: $ Price

Microeconomics: Private and Public Choice (MindTap Course List)
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter5: Difficult Cases For The Market And The Role Of Government
Section: Chapter Questions
Problem 10CQ
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International Agreements on Trade and the Environment a. In panel A, Home enjoys positive production externalities b. In panel B, Home enjoys positive consumption externalities associated with a particular good. Label the supply and social marginal cost curves on Panel A below. associated with a good. Label the demand and social marginal benefit curves on Panel B below. Panel A: Positive production externality Panel B: Positive consumption externality 20 SMC 20 SMB 19 19 18 18 17 17 16 16 15 15 14 14 13 13 12 12 11 11 10 10 H. H. 9 7 5 4 4 3 3 2 D 0 1 2 3 45 6789 10 11 12 13 14 15 16 17 18 19 20 Quantity 0 1 2 3 4 56789 10 11 12 13 14 15 18 17 18 19 20 Quantity c. Taking into account the social marginal costs (SMC), d. Taking into account the social marginal benefits (SMB), calculate the net change in welfare to Home from free trade. calculate the net change in welfare to Home from free trade. Net change in welfare: $ Net change in welfare: $
Transcribed Image Text:International Agreements on Trade and the Environment a. In panel A, Home enjoys positive production externalities b. In panel B, Home enjoys positive consumption externalities associated with a particular good. Label the supply and social marginal cost curves on Panel A below. associated with a good. Label the demand and social marginal benefit curves on Panel B below. Panel A: Positive production externality Panel B: Positive consumption externality 20 SMC 20 SMB 19 19 18 18 17 17 16 16 15 15 14 14 13 13 12 12 11 11 10 10 H. H. 9 7 5 4 4 3 3 2 D 0 1 2 3 45 6789 10 11 12 13 14 15 16 17 18 19 20 Quantity 0 1 2 3 4 56789 10 11 12 13 14 15 18 17 18 19 20 Quantity c. Taking into account the social marginal costs (SMC), d. Taking into account the social marginal benefits (SMB), calculate the net change in welfare to Home from free trade. calculate the net change in welfare to Home from free trade. Net change in welfare: $ Net change in welfare: $
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