Price of Gardening ($) L M O P S U Q N MPB MC MSB Quantity of Gardening a) Using the letters on the diagram, describe the areas of (i) consumer surplus and (ii) producer surplus if the private market equilibrium occurs. b) Using the letters indicated on the diagram, describe the areas of (i) total social surplus and (ii) total externality if the socially optimal (Pareto efficient) level of gardening occurs. c) What is the area of deadweight loss? Does the neighborhood want to increase or decrease the level of gardening? If the neighborhood association wanted to effect this change, what measures could it take?
Price of Gardening ($) L M O P S U Q N MPB MC MSB Quantity of Gardening a) Using the letters on the diagram, describe the areas of (i) consumer surplus and (ii) producer surplus if the private market equilibrium occurs. b) Using the letters indicated on the diagram, describe the areas of (i) total social surplus and (ii) total externality if the socially optimal (Pareto efficient) level of gardening occurs. c) What is the area of deadweight loss? Does the neighborhood want to increase or decrease the level of gardening? If the neighborhood association wanted to effect this change, what measures could it take?
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter12: Environmental Protection And Negative Externalities
Section: Chapter Questions
Problem 10SCQ: Suppose a city releases 16 million gallons of raw sewage into a nearby lake. Table 12.8 shows the...
Related questions
Question
![7) Issa is regularly outside of her house and tending her flowers and gardening. Her flowers are so vibrant and
colorful that everyone in the neighborhood enjoys looking at them and the property prices of all the houses in the
neighborhood have increased. The marginal social benefit (MSB), marginal private benefit (MPB) and marginal
cost (MC) curves of her gardening activities are drawn below.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa56f5148-ac69-440f-afc9-0f30fd0c715d%2Fe76457f4-74b9-45af-bf27-e980c19a06c0%2Fd9by0mb_processed.png&w=3840&q=75)
Transcribed Image Text:7) Issa is regularly outside of her house and tending her flowers and gardening. Her flowers are so vibrant and
colorful that everyone in the neighborhood enjoys looking at them and the property prices of all the houses in the
neighborhood have increased. The marginal social benefit (MSB), marginal private benefit (MPB) and marginal
cost (MC) curves of her gardening activities are drawn below.
![Price of
Gardening ($)
L
M
O
P
S
כ
Q
N
MPB
MC
MSB
Quantity of Gardening
a) Using the letters on the diagram, describe the areas of (i) consumer surplus and (ii) producer surplus if the private
market equilibrium occurs.
b) Using the letters indicated on the diagram, describe the areas of (i) total social surplus and (ii) total externality if
the socially optimal (Pareto efficient) level of gardening occurs.
c) What is the area of deadweight loss? Does the neighborhood want to increase or decrease the level of gardening? If
the neighborhood association wanted to effect this change, what measures could it take?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa56f5148-ac69-440f-afc9-0f30fd0c715d%2Fe76457f4-74b9-45af-bf27-e980c19a06c0%2Folov32_processed.png&w=3840&q=75)
Transcribed Image Text:Price of
Gardening ($)
L
M
O
P
S
כ
Q
N
MPB
MC
MSB
Quantity of Gardening
a) Using the letters on the diagram, describe the areas of (i) consumer surplus and (ii) producer surplus if the private
market equilibrium occurs.
b) Using the letters indicated on the diagram, describe the areas of (i) total social surplus and (ii) total externality if
the socially optimal (Pareto efficient) level of gardening occurs.
c) What is the area of deadweight loss? Does the neighborhood want to increase or decrease the level of gardening? If
the neighborhood association wanted to effect this change, what measures could it take?
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 1 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Principles of Economics 2e](https://www.bartleby.com/isbn_cover_images/9781947172364/9781947172364_smallCoverImage.jpg)
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
![Essentials of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781337091992/9781337091992_smallCoverImage.gif)
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Micro Economics For Today](https://www.bartleby.com/isbn_cover_images/9781337613064/9781337613064_smallCoverImage.gif)
![Principles of Economics 2e](https://www.bartleby.com/isbn_cover_images/9781947172364/9781947172364_smallCoverImage.jpg)
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
![Essentials of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781337091992/9781337091992_smallCoverImage.gif)
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Micro Economics For Today](https://www.bartleby.com/isbn_cover_images/9781337613064/9781337613064_smallCoverImage.gif)
![Economics For Today](https://www.bartleby.com/isbn_cover_images/9781337613040/9781337613040_smallCoverImage.gif)
![Brief Principles of Macroeconomics (MindTap Cours…](https://www.bartleby.com/isbn_cover_images/9781337091985/9781337091985_smallCoverImage.gif)
Brief Principles of Macroeconomics (MindTap Cours…
Economics
ISBN:
9781337091985
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning