**Policymakers are provided data about the private and social benefits of a good being sold in the market.**| Quantity | Private MB ($) | Social MB ($) ||----------|---------------|---------------|| 4 | 6 | 9 || 5 | 4 | 7 || 6 | 2 | 5 || 7 | 0 | 3 |**What is the size of the externality? If the externality is positive, enter a positive number. If negative, make it a negative number.**[_Enter numeric value_]**Given this data, policymakers must decide whether to address the associated externality with a subsidy or a tax. As their economic consultant, which of the two policy tools would you recommend?**- a subsidy- a tax**Explanation:**The given table presents the quantities, private marginal benefit (Private MB), and social marginal benefit (Social MB) of a good. To find the size of the externality, calculate the difference between the Social MB and the Private MB for each quantity level. The externality is positive if Social MB > Private MB and negative if Social MB < Private MB.Policymakers need to decide on using either a subsidy or a tax to align private incentives with social benefits, based on the nature of the externality. If the externality is positive (Social MB > Private MB), a subsidy might be recommended. If negative, a tax might be preferable.

Private benefit is the benefit obtained from the consumption or production of a good by an…

Answered: olicymakers are provided data about the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Sub : EconomicsPls answer very fast.i ll upvote correct answer . Thank You The figure below shows the market for water-skiing permits on Shuswap Lake in British Columbia. Every person who wishes to water ski must obtain a permit, which is valid for one day. Suppose that each water skier imposes a $4 negative externality on other people who use the lake.
1. When a production externality has a beneficial effect on a bystander at the market equilibrium a. the market will be efficient b. the social cost of production is less than the private cost c. society is unlikely to benefit from production subsidies d. the private benefit from consumption is less than the social cost of production 2. In the short term, we would expect home construction to have a: a. High elasticity of demand b. Low elasticity of demand c. Low elasticity of supply d. High elasticity of supply 3. Which of the following would be associated with monetary policy operations in response to an economic downturn: a. A shift of the money demand curve to the right. b. A shift of the money supply curve to the right. c. A shift of the money demand curve to the left. d. A shift of the money supply curve to the left. 4. If the government cuts government spending, then over time the government budget deficit: a. will definitely rise b. will definitely fall c. may fall, or…
A local school administrator observes an increase in the number of flu cases in the public schools over the last two years. She is concerned that some families cannot afford flu vaccine and are therefore not having children vaccinated. She is also concerned that the failure to vaccinate some children is putting other children at risk, so she proposes that the state subsidize vaccines to increase coverage rates. a. Determine whether the failure to vaccinate some children is an external benefit or an external cost. If an external cost is present, move point A and point B to show the marginal social cost curve. If an external benefit is present, move point A and point B to show the marginal social benefit curve. Place point C at the equilibrium outcome. Place point D at the socially optimal outcome. Flu vaccines A B D Supply (marginal private cost) Price
What is an external benefit? An external benefit is a benefit that OA. always equals external cost OB. experiences increasing marginal returns C. affects someone other than the buyer of a good OD. is greatest at the equilibrium point
a. When a firm imposes an external social cost (negative externality), the government should impose a tax on production equal to the externality cost to ensure that the market will achieve the socially optimal outcome. Select one: True False b. The socially optimal level of emissions of most pollutants is zero. Select one: True False c. Externalities are only inefficient when they impose a cost. They are not inefficient when they bestow a benefit. Select one: True False
11. Compared to a good with no externalities, a good with a negative externality will appear to have experienced a OIncrease in Supply ODecrease in Supply Olncrease in Demand ODecrease in Demand at each corresponding price...
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Sub : EconomicsPls answer very fast.i ll upvote correct answer . Thank You The figure below shows the market for water-skiing permits on Shuswap Lake in British Columbia. Every person who wishes to water ski must obtain a permit, which is valid for one day. Suppose that each water skier imposes a $4 negative externality on other people who use the lake.
What exactly is a Pigovian tax? Give some instances of how the Pigovian tax can be used to tackle environmental issues.
Refer to Figure. The graph represents a market in which 24 22 22 Price 18 16 81 Social cost (private cost and external cost) Supply (private cost) Demand (private valne) 120 160 Quantity a. Othere is no externality. b. Othere is a positive externality. c. Othere is a negative externality. d. The answer cannot be determined from inspection of the graph.
Suppose Scott and Bob live on the same street. in the winter, both of them like their street plowed. Bob's demand is given by 0 = 40 - P, and Scott's demand is gren by 0 = 30 - 2P. Suppose the marginal cost of plowing the snow is constant at $35 (a) What is the social marginal benefit curve? (b) What is the socially efficient amount of plowing? (c) What would be the socially efficient amount of plowing if the marginal cost of plowing were $5?
32 28 Social Cost 24 20 Private Cost 16 12 8 Demand 4 100 200 300 400 500 a. How many units of good are produced at the market equilibrium3 b. How much is the external cot for each unit of good produced? c. How many units of good should be produced at the social optimum? d. In order to reach the social optimum, what should the government do?

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