Problem 05-01 (algo)On the basis of the three Individual demand schedules in the following table, and assuming these are the only three people in thesociety, determinea. the market demand schedule on the assumption that the good is a private good andb. the collective demand schedule on the assumption that the good is a public good.Instructions: Enter your answers as a whole number.Individual 1Individual 2Individual 3(a) Private Demand(b) Public DemandPriceQdPriceQdPriceQdPriceQdPriceQd$80$81$80$811707270722606361в435154525744245434105333в34313в24272521671518161198

To determine the market demand schedule for a private good, we sum the quantities demanded by all…

Answered: Problem 05-01 (algo) On the basis of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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3. The effect of negative externalities on the optimal quantity of consumption Consider the market for electric cars. Suppose that a electric car manufacturing facility dumps sludge into a nearby river, creating a negative externality for those living downstream from the facility. Producing additional electric cars imposes a constant per-unit external cost of $600. The following graph shows the demand (private value) curve and the supply (private cost) curve for electric cars. Use the purple points (diamond symbol) to plot the social cost curve when the external cost is $600 per unit. PRICE (Dollars per unit of electric cars) 2000 1800 1600 1400 1200 1000 800 600 400 200 0 0 + 1 O □ ☐ O 2 3 4 5 QUANTITY (Units of electric cars) The market equilibrium quantity is ☐ Supply (Private Cost) 6 Demand (Private Value) 7 Social Cost (?) units of electric cars, but the socially optimal quantity of electric car production is To create an incentive for the firm to produce the socially optimal…
The graph shows the marginal benefit and marginal cost of a waste disposal system in a city of 1 million people. What is the efficient capacity of the waste disposal system and how much does each citizen pay in taxes? The efficient capacity is ... million gallons a day. If the city installs the efficient capacity, each person pays ... in taxes.
What is the definition of public goods? Why does the private market not produce the efficient quantity of a public good?
The following table shows how the marginal benefit of a service varies for five consumers. Quantity 1 2 3 4 Serkan 150 125 100 75 Asuman 125 100 75 50 Bahar 100 75 50 25 Murat 200 150 125 125 Meriç 600 400 200 150 Derive the demand curve for this service assuming that it is a public good. If marginal cost of the good is 850, what is the efficient output of the public good? If marginal cost of the good is 425, what is the efficient output of the public good? If marginal cost of the good is 850, what is the efficient output assuming it is private good?
4 This is a graph reprinted from Section 12.1 the Economics of Pollution. Please explain the graph with particular attention paid to why there are two supply curves. How can a government use this graph to establish pollution controls?
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?
Part d-g
On the basis of the three individual demand schedules below, and assuming these three people are the only ones in the society, determine (a) the market demand schedule on the assumption that the good is a private good, and (b) the collective demand schedule on the assumption that the good is a public good. Instructions: Enter only whole numbers in the table below. Demand Curve Private Individual #1 Individual1 #2 Individual #3 Good Demand Curve - Public Good Amount Society is Willing to Рay 2$ Price ed Price Qd Price ed Price $8 1 $8 $8 1 $8 1 7 2 2 7 2 3 3 6 3 5 4. 5 4 4 2 4. 5 4. 3 6. 3 2. 7 2. 4 8 1. 1 8 1 8
1. What kind of good is it? Determine whether each of the following goods is a private good, a public good, a common resource, or a club good. Private Good Public Good Club Good Common Resource A new drone that you take turns flying with your friends A large, beautiful fountain in a town square A dock on a lake that is open to the public
5
Refer to Figure. Which of the following statements is correct? Price 22 24 22 81 18 16 Social cost (private cost and external cost) Supply (private cost) Demand (private value) 120 160 Quantity a. The private cost of producing the 160th unit of output is $16 b. The social cost of producing the 160th unit of output is $22. c. d. The external cost of producing the 160th unit of output is $6. All of the above are correct.
5.. "Since a public good is enjoyed by all members of society, willingness to pay for the good will not diminish as the amount produced increases." Evaluate and use an example to support your answer. This statement is (correct incorrect). Public goods face (increasing, constant, diminishing ) returns like any other good. Consider the number of highways in a town, for example. Citizens of a town are very willing to pay for the first highway, as it produces large gains to the town. Successive highways produce (more and more, less and less ) willingness to pay because the citizens face lower and lower gains from the increased number of highways. In a town of, say 20,000, 15 highways (would, would not) produce much more benefit than just 2 or 3 highways because of ( increasing, constant, diminishing ) returns.

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