Question 1PriceS₁ =Private CostXD₁ =Private BenefitQuantity of aviation securityFigure 5-14 shows the market for aviation security. Aviation security generatesa positive externality because people who are not airline passengers benefitfrom aviation security.Refer to Figure 5-14 to answer the following questions.1.1 In the absence of any government intervention what is the equilibriumlevel of security that airlines will supply? Using the diagram, denote thislevel, Q*. Briefly explain why this quantity is not the economically efficientlevel of aviation security.1.2 In the diagram, illustrate the presence of positive externalities in theaviation security market. Label any new curve that you draw.1.3 On your diagram identify the economically efficient level of aviationsecurity. Denote this level Qe.1.4 Explain how a government subsidy for the airlines can bring about theeconomically efficient aviation security level. Be sure to identify the size of thesubsidy.

Question 1.1In the absence of any government intervention, the equilibrium level of security that…

Answered: Question 1 Price S₁ = Private Cost X D₁…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Use the table below to answer the questions: Quantity Supplied (Private Supplied (Social Cost only) 12,000 14,000 17,000 20,000 24,000 Quantity Quantity Demanded Price 19,000 14,000 9000 5000 1000 $50 $55 $60 $65 $70 Cost) 6000 7500 9000 11,000 14,000 (a) Find the equilibrium price, assuming sellers ignore negative externalities. (b) Find the equilibrium quantity, assuming sellers ignore negative externalities. (c) Find the optimal price, including external costs. (d) Find the optimal quantity, including external costs.
I chose option D and got this wrong. I thought that when you had a positive externality The demand curve move to the right. Wouldn’t this mean that the level of output and the price would be greater than the free market ones? can you explain how my answer is wrong? What is correct?
Note:The solution should not be hand written.
I need some help drawing the curve for p1+p2+p3
1. Melissa, a physical therapist, develops a stretching routine that relieves back pain. Her clients can perform this routine without diminishing others’ ability to perform the routine, which implies that Melissa’s stretching routine is… rival non-rival excludable a common-resource good
Parks confer many external benefits on society: open space, trees that reduce pollution, and so on. Therefore, the market equilibrium quantity of parks is not equal to the socially optimal quantity. The following graph shows the demand for parks (their private value), the supply of parks (the private cost of producing them), and the social value of parks, including both the private value and external benefits. Use the black point (plus symbol) to indicate the market equilibrium quantity. Next, use the purple point (diamond symbol) to indicate the socially optimal quantity.
Question is in the photo! Thank you so much!
Based on the graph:a. In this market, how much is the external cost from the production of each unit of tobacco? To reach the social optimum, should the government provide a subsidy or impose a tax? If so, how much tax or subsidy? b. Is there a deadweight loss in this market? If so, why is there a deadweight loss?
2. Given the demand function of motorcycle: Q = 500 – 100P where Q is total quantity demanded (unit: 10,000) and P is daily price (in unit of US$). (1) If the current daily price is US$1.0, please find the total quantity demanded. (2) If the external costs of motorcycle ($2) are all internalized, what would be the total quantity demanded? (3) Please also discuss impacts of this internalization policy on supply, demand and public infrastructures.
The diagram belew gives informetion about demand and supply for robots in Econland 13 12 11 10 $ 9 8. 4. 012 3 4 5 6 7 89 10 Suppose that each robot in Econland creates a $5 positive externality because of how they make neighborhoods a safer place. What is the consumer surplus of Econland in the free market? (Note: A common question here is whether you should include the externality or not. This is part of this question for you to decide on whether to do so or not.) O -12.5 O 37.5 O 17.5 O75 O 12.5 432109876543210
If a competitive market is characterized by a negative externality, then which of the following statements is true Question 5Answer a. Social surplus is less than market surplus b. Social surplus is equal to market surplus c. Social surplus may be greater than or less than market surplus, depending on the size of the externality d. Social surplus is greater than market surplus
8: Consider the market for alcohol. The demand for alcohol is given by the inverse demand function p = 1500 – 10Q The market cost function for firms that sell alcohol is C"(Q) = 300Q + 10Q² Alcohol consumption sometimes produces negative externalities, such as drunk driv- ing, health costs, or violent behavior. The social cost of these externalities is C°(Q) = 5Q? %3D Note that both CP(Q) and C9(Q) are cost functions, not marginal cost functions. (3) How much deadweight loss is there at the competitive equilibrium? Draw a graph to support your answer. (4) Now suppose there is a monopolist that sells alcohol. How much is produced by the monopolist? Is an unregulated competitive market or an unregulated monopolist better (in terms of social welfare) in this case?

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