Policymakers are provided data about the private and social benefits of a good being sold in the market.Quantity Private MB ($) Social MB ($)668746892042What is the size of the externality? If the externality is positive, enter a positive number. If negative, make it anegative number.$Given this data, policymakers must decide whether to address the associated externality with a subsidy or a tax. As theireconomic consultant, which of the two policy tools would you recommend?a taxa subsidy

Amount of externality: $2The table shows the private marginal benefit (PMB) and the social marginal…

Answered: Policymakers are provided data about…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter10: Externalities

Section: Chapter Questions

Problem 1PA

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Draw a standard supply and demand diagram for televisions, and indicate the equilibrium price and output. a. Assuming that the production of televisions generates external costs, illustrate the effect of the producers being forced to pay a tax equal to the external costs generated, and indicate the equilibrium output. b. If instead of generating external costs, television production generates external benefits, illustrate the effect of the producers being given a subsidy equal to the external benefits generated, and indicate the equilibrium output.
A) Figure 10-1 (above)- For the described negative externality, what is the market Price/Quantity combination without any efforts to correct the market? B) Figure 10-1 (above)- For the described negative externality, what will happen to the equilibrium price and quantity if the government imposes a tax to remedy the negative externality (don't use exact numbers)? C) For a negative externality, briefly explain why and how the governmentmay get involved in the market. In your response, provide an example (type of product or service).
Policymakers are provided data about the private and social benefits of a good being sold in the market. Quantity Private MB ($) Social MB ($) 4 9. 5 4 7 6. 2 5 7 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
In the past, some counties and countries have imposed taxes on sugar, saturated fats, and food made with those ingredients as a way to reduce consumption of those foods. Assume the government imposes a unit tax on all chocolate. Answer the following questions Is there an externality from consuming chocolate? Explain why or why not. Use a correctly labeled graph to show what happens in the market for chocolate as a result of the unit tax. On your graph, show the market equilibrium before and after the tax (i.e. show the equilibrium prices and quantities.) Show graphically what happens to consumer surplus and producer surplus after the tax (you may need a separate graph to show this.) Will consumers be able to shift this tax to sellers? If yes explain why/how. If no explain why not. Based on your answer to c, who will bear the incidence of this tax? Show this on a graph. How will consumers respond to the tax on chocolate? How will candy companies respond strategically to the tax on…
Use the graph attached What is the dead weight loss that results from this externality. a) QE - Q* b) Pc- PE c) Pc- Pp d) (Pc-Pp) * QE e) (Pc-Pp) * (QE-Q*) x ½
Give an example of an externality. Explain how a tax or subsidy might be used to “correct” for the inefficiency of a market equilibrium in the presence of an externality.
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When an externality occurs governments may intervene to try to line up the social costs/benefits with the private costs/benefits. The following graph illustrates an externality in such a market. What type of government intervention would be recommended as a result of the externality indicated in the graph? Price Tax Subsidy Market Equilibrium SC PC PB Quantity
Before you answer this question, you may find it easier if you sketch a graph of a market with a subsidy given to buyers. In a market where a per-unit subsidy has been given to buyers, but there are no externalities in that market, I Select] shifts out by the amount of the subsidy. The equilibrium quantity in the market Select ] and the equilibrium price [ Select ] Since demand represents I Select ] and supply represents | Select ) at the equilibrium quantity after the subsidy is imposed | Select ) This means that I Select | . which is represented by I Select ]
Some economists argue that early child care generates an external benefit to society. Consider the following supply-and-demand graph for early childhood education. A. How does the market equilibrium differ from what is best for society? B. If the government was going to provide a per-unit subsidy in this market in order to achieve the socially optimal outcome, how large of a subsidy would the government ne to provide? C. How much in total would the government need to spend in this market each month to achieve a socially optimal outcome? Price ($ per month) Supply $1,300 $1,200 $1,000 $900 Marginal social benefit Marginal private benefit (demand) 23 26 Quantity (millions per month)
Price MCS $5 per unit MC P B cID H Quantity QE Negative Externality The following questions refer to the accompanying diagram, which shows the effects of a negative externality created by an industry's production. Refer to the graph. According to a Pigovian analysis of this externality, when a tax of $5 per unit is imposed on the firms in this industry, the external costs created by the firms' production will equal area C + D + E + G + H. ) area C + D + G + H. area C+ G. zero.
PLEASE DONT USE CHATGPT, I NEED THE ACTUAL DIAGRAMSCreate two new demand and supply diagrams to demonstrate the following: In your first diagram, show the negative externality of consuming too much fast food. Carefully label your diagram and identify the deadweight loss. In your second diagram, add a tax to this market. Highlight what happens to consumption. In a dot point below your second diagram, briefly tell us whether the second diagram has a deadweight loss. Please note that consumption and production externalities are different. Here we specifically need to observe consumption externalities, if any exist.

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