Macmillan Learning (Table: Total Cost and Total Individual Benefit Received from Sanitation Workers) Use Table: Total Cost and Total Individual Benefit Received from Sanitation Workers. If there are 1,000 residents who each enjoy the same individual benefit of sanitation services, shown in the table, what is the total social benefit of two sanitation workers? Table: Total Cost and Total Individual Benefits Received from Sanitation Workers Quantity of sanitation workers 0 1 2 3 4 5 $70 $70,000 O $4,000 O $40,000 Total cost $0 Total individual benefit $0 40 20,000 40,000 70 60,000 90 80,000 100,000 105 100

Macmillan Learning (Table: Total Cost and Total Individual Benefit Received from Sanitation Workers) Use Table: Total Cost and Total Individual Benefit Received from Sanitation Workers. If there are 1,000 residents who each enjoy the same individual benefit of sanitation services, shown in the table, what is the total social benefit of two sanitation workers? Table: Total Cost and Total Individual Benefits Received from Sanitation Workers Quantity of sanitation workers 0 1 2 3 4 5 $70 $70,000 O $4,000 O $40,000 Total cost $0 Total individual benefit $0 40 20,000 40,000 70 60,000 90 80,000 100,000 105 100

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Table 11-1Consider the town of Springfield with only three residents, Sophia, Amber, and Cedric. The three residents are trying to determine how large, in acres, they should build the public park. The table below shows each resident’s willingness to pay for each acre of the park. Acres Sophia Amber Cedric 1 $10 $24 $6 2 8 18 5 3 6 14 4 4 3 8 3 5 1 6 2 6 0 4 1 7 0 2 0 Refer to Table 11-1. Suppose the cost to build the park is $24 per acre and that the residents have agreed to split the cost of building the park equally. If the residents decide to build a park with size equal to the number of acres that maximizes total surplus from the park, how much total surplus will Amber receive? a. $56 b. $0 c. $26 d. $32
5. Discuss the concept of externality in health care using the example of vaccination against an infectious disease. How can the government internalize this externality to achieve social/optimal equilibrium? Why is this governmental intervention important and what are the different policy options?
6. Achieving lower pollution Suppose a political candidate criticizes a government pollution permit policy that she says lets corporations buy and sell the right to pollute. She argues that our right to breathe and the future of our planet require real regulation instead of this type of government policy. Which of the following describes why most economists would disagree with her statement? The environment is so important that it should be protected as much as possible, regardless of the cost. A free market in tradable pollution permits is typically more efficient than government regulation. A corrective tax would result in a more efficient outcome than either tradable permits or government regulation would. Clean air is a fundamental right, and government regulation will allow too much pollution.
Assume that the parcels are essentially identical and that the minimum selling price of each is $400,000. The following table states each person's willingness and ability to purchase a parcel. Andrew Beth Lorenzo Neha Sam Teresa Which of these people will buy one of the three beachfront parcels? Check all that apply. Andrew Beth Lorenzo Neha willingness and Ability to Purchase (Dollars) 340,000 Sam O Teresa 330,000 550,000 480,000 420,000 380,000 Assume that the three beachfront parcels are sold to the people that you indicated in the previous section. Suppose that a few days after the last of those beachfront parcels is sold, another essentially identical beachfront parcel becomes available for sale at a minimum price of $360,000. This fourth parcel be sold, because will purchase it from the seller for at least the minimum price.
(Figure: The Quantity of Pollution in Coal Production) Use Figure: The Quantity of Pollution in Coal Production. Whe this economy produces 50 tons of emissions: MSB, MSC 200 150 100 50 MSB 200 Quantity of pollution emisions (tons) it is producing below the socially optimal level of output. the marginal social cost equals the marginal social benefit. it is producing at its socially optimal level of output. the marginal social cost is greater than the marginal social benefit. 0 50 MSC 100 150
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7) The graph below depicts the social loss from the existence of health insurance in the presence of moral hazard. Price Demand curve with partial coinsurance Quantity a. What is the cause of the social loss? Briefly explain. b. Why do we have health insurance if social loss is created as a result of health insurance? ( Social loss
4. Understanding different policy options to correct for negativeexternalities Carbon dioxide emissions have been linked to melting of sea ice. The following table lists some potential regulations targeting the amount of airborne carbon dioxide. For each policy listed, identify whether it is a command-and-control policy (regulation), tradable permit system, corrective subsidy, or corrective tax. Tradable Permit System Public Policy The government limits total carbon-dioxide emissions by all factories to 260,000 tons per five years. Each individual factory is given the right to emit 230 tons of carbon dioxide, and factories may buy and sell these rights in a marketplace. Trees take carbon dioxide out of the air and convert it to oxygen, so the government funds a tree-planting initiative by offering $440 to any citizen who plants a tree. The government orders every factory to adopt a new technology, which reduces carbon-dioxide emissions into the atmosphere. The government charges…
43. A city currently emits 16 million gallons (MG) of raw sewage into a lake that is beside the city. Table 12.13 shows the total costs (TC) in thousands of dollars of cleaning up the sewage to different levels, together with the total benefits (TB) of doing so. Benefits include environmental, recreational, health, and industrial benefits. TC TB 16 MG Current Current 12 MG 50 800 8 MG 150 1300 4 MG 500 1850 O MG 1200 2000 Table 12.13 a. Using the information in Table 12.13 calculate the marginal costs and marginal benefits of reducing sewage emissions for this city. b. What is the optimal level of sewage for this city? How can you tell?
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Refer to the image Ch. 18, Example 18.7 - 'The Demand for Clean Air' Why is clean air a public good? What does Fig. 18.16 (image provided) show about the willingness to pay for clean air?