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- What is the externality in the market for alcohol? Draw a market diagram for alcoholic beverages, including private and social cost curves and private and social value curves. Identify the market equilibrium quantity, the socially optimal quantity, and thedeadweight loss associated with the externality. What policies do governments use to try to eliminate the externality associated with drinking DRAW PICTURE PLUS STEP BY STEP HOW TO DRAW IT Draw a market diagram for alcoholic beverages, including private and social cost curves and private and social value curves Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Only typed answer You are an industry analyst that specializes in an industry where the market inverse demand is P = 100 - 3Q. The external marginal cost of producing the product is MCExternal = 6Q, and the internal cost is MCInternal = 14Q. Instruction: Round your answers to the nearest two decimal places. a. What is the socially efficient level of output? units b. Given these costs and market demand, how much output would a competitive industry produce? units c. Given these costs and market demand, how much output would a monopolist produce? units d. Which of the following are actions the government could take to induce firms in this industry to produce the socially efficient level of output. Instructions: You may select more than one answer. Click the box with a check mark for the correct answers and click twice to empty the box for the wrong answers. You must click to select or deselect each option in order to receive full credit. Pollution taxes…Question 4 The private marginal benefit for commodity X is given by 10-X, where X is the number of units consumed. The private marginal cost of producing X is constant at $5. For each unit of X produced, an external cost of $2 is imposed on members of society. In the absence of any government intervention, how much X is produced? What is the efficient level of production of X? What is the gain to society involved in moving from the inefficient to the efficient level of production? Suggest a Pigouvian tax that would lead to the efficient level.
- . Draw a graph for a market where a negative externality occurs. Show the market supply curve and the market outcomes for price and quantity. Show the supply curve that takes all the costs in to account. Show the price and quantity that would be best for society when we take all the costs of production and consumption in to account.(1) Don Juan complains that the river has become polluted since a tobacco company X started operating four months ago and since then has been dumping its effluent in the river. The government endeavors to intervene by taxing company X but the former is not fully informed about the cost of pollution to the society and the cost of tax to the company. What should the government do to properly regulate water pollution?The graph shows the unregulated market for electricity. Suppose that at every quantity produced, the marginal external cost of electricity equals the marginal private cost of production. To show the market outcome, draw the following four items on the graph: 1. Draw a point to show the marginal social cost when the utility produces 500 kilowatts per day. Label it 1. 2. Draw the marginal social cost curve. Label it MSC . 3. Draw a point to show the electricity produced and its marginal social cost. Label it 2. 4. Draw a shape to show the deadweight loss created. Label it DWL . >>> Draw only the objects specified in the question.
- When economists say that one of the characteristics of a Public Good is that it is “non-excludable”, they mean: Select one: a. that the government makes the good widely available to virtually anyone in the economy. b. the good’s price is so low that virtually anyone can afford it. c. that once the good is supplied, it is difficult to prevent those who do not pay for it from consuming the good. d. that once a unit of the good is provided, it can be jointly consumed by more than one consumer at the same time.Use the following to answer questions 7-8: Figure: Positive Externalities and Production of Semiconductor Chips Price, marginal | social benefit of chip $55 50 45 40 35 30 25 20 15 10 100 200 300 400 500 600 700 800 900 Quantity of chips 7. (Figure: Positive Externalities and Production of Semiconductor Chips) If the marginal external benefit of producing a chip is $20, then the socially optimal quantity of chips is and the socially optimal price is A) 200; $20 B) 300; $25 C) 500; $35 D) 600; $40 8. (Figure: Positive Externalities and Production of Semiconductor Chips) If the socially optimal production of chips is 500, the government could achieve the socially optimal level of production by granting a Pigouvian subsidy of: A) $5. B) $10. C) $15.Describe a positive or negative externality that you have observed in your life. In the example you provide, determine if the externality is positive or negative, explain why, and discuss if you feel like government intervention is present and/or needed. If so, how does (or how could?) the government increase market efficiency?
- The following graph shows the demand (marginal private benefits) and supply (marginal private costs) curves for a good. The dashed drop lines on the graph reflect the market equilibrium price and quantity for this good. Suppose that a negative externality arises as a result of the production of this good. Adjust the following graph by shifting one of the curves to reflect the presence of the negative externality. PRICE AND COST greater less The market output is greater QUANTITY Supply Demand than the socially optimal output. Demand Supply (?You are an industry analyst that specializes in an industry where the market inverse demand is P = 300 - 4Q. The external marginal cost of producing the product is MCExternal = 8Q, and the internal cost is MCInternal = 15Q.Instructions: Enter your responses rounded to the nearest two decimal places.a. What is the socially efficient level of output? unitsb. Given these costs and market demand, how much output would a competitive industry produce? unitsc. Given these costs and market demand, how much output would a monopolist produce? unitsd. Which of the following are actions the government could take to induce firms in this industry to produce the socially efficient level of output.Instructions: In order to receive full credit, you must make a selection for each option. For correct answer(s), click the box once to place a check mark. For incorrect answer(s), click twice to empty the box.check all that apply Pollution taxes Nonrival consumption Pollution permitsMarket failure occurs when the private sector fails to distribute our resources efficiently through the pricing system. Externalities and a lack of public goods and services are two examples of market failure.Give an example of a positive and a negative externalities that someone faces in their life. Also, what are some public goods and services that you utilize in your everyday life?
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