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- Lecture: Externality - Pigou8. All-Leather is a tanning company located on Lake Michigan in Chicago. Its total cost functionis C(QA) = 125 + 8QA + 5QA2, where QA is leather production per week in thousands of pounds.a) If leather sells for $408 per thousand pounds, how much leather will All-Leather produce?How much profit does All-leather earn?Enjoy is a beverage company located on Lake Michigan near All-Leather in Chicago. Enjoy’sproduction of beverages is negatively affected by water pollution from All-Leather’s productionof leather. Enjoy’s total cost function to produce beverages isC(QE) = 10QE +3QE2 + 3QA2where QE is Enjoy’s weekly production of beverages, in thousandsof gallons and, as above, QA is All-Leather’s weekly production of leather.b) Is this an example of a pecuniary externality or a real externality? Explain.c) What is the extra cost to Enjoy from an additional thousand tons of leather production by AllLeather (i.e., the external marginal cost of an extra unit of QA…Please, Provide an Explanation for the Ranges/Point in the Follow (Encircled Below in Red. What Do the Ranges/Point Refer To & H They Calculated?) With Z representing the Level of Mitigation (Z): Marshland, MB = 3-Z Dampland, MB=4-2Z Wetland, MB 11-Z The Marginal Cost of Flood Mitigation (MC): MC=2+12Z a. What is the Socially Optimal Level of Z(Zopt)? Answer: From 0-2 MSB = [(3- Z)+(4- 2Z) + (11- Z)] = [(3+ 4+ 11)-(Z+2Z+Z)] = 18-4Z From 2-3 MSB=(3- Z) + (11- Z) = [(3 + 11)-(Z+Z)] = 14-2Z From 3-10-MSB = 11 - Z @11MSB=02) Use the figure below to answer the following questions. Price and cost (dollars per tonne of paper) MSC 15 MC 14 13 12 11 D = MSB %3D 30 40 50 60 70 Quantity of paper (tonnes) Figure 1 a) Refer to Figure 1 What is the unregulated equilibrium in the paper market? b) Refer to Figure 1 What is the marginal external cost in this market? c) Refer to Figure 1 What is needed to achieve the efficient output in the market?
- CH9: which of the following statements are true about ecological footprint? The Earth has about 4.2 acres of sustainable productive land area per person, but humans consume 7.1 acres worth of resources. Since the 1970s, our economic growth has supported our increasing planetary population with unsustainable methods. Both A and B ONeither A nor BD7) Why is congestion treated as an externality in Urban Economics?After two years of suspension, this 2022 the National Cheese and Wine Fair returns, which will take place on weekends from May 20 to June 5, in Tequisquiapan. The 42nd edition is expected to generate an economic benefit of 120 million pesos and receive 60,000 visitors, informed the Coordinator of Liaison and Monitoring of the State Tourism Secretariat, Yara Beltrán Gómez. During the presentation of the fair, he said that the state has more than 30 vineyards and 11 artisan cheese factories, emphasizing that it is the most visited wine tourism region in the country, attracting a million visitors annually. Based on your knowledge of economics, and that you are a supplier of grapes to produce Cavernet wine, and where you take the price of grapes as established by the market, determine the optimal amount of production. Includes graphical analysis. a) Where the IMG = Demand b) Donate the IMG=CMG c) Where the Img=CmeT d) All of the above
- MSC MPC [Suggested time 12 mins.] MSB HPB Use the labelled points in this graph to identify the requested area. Pay attention to whether the points are labelled with a capital or lower-case letter. Use the same in your answer. Do not include any spaces, numbers, or symbols/punctuation in your answer -- just the letters close together.[4] At their choice of emissions after trading permits, what is each firm’s total abatement cost? Firm 1’s Total Abatement Cost ___________ Firm 2’s Total Abatement Cost ___________ [5] Alternatively, what could the regulator choose for an emissions tax to achieve the goal of 25 units in a cost-effective manner?a-Negative Externalities----What Kind of Effect Does It Create MSC and MPC b-What kind of an effect does it have in the market equilibrium that gets established? c-How does the q * compare with the q that is a social optimum. Which social optimum ensuring condition is violated as a result of externalities(negative or positive) d-What about a monopoly? How does market power change the relationship between MC and the aggregate benefit curve? What do we need to assume about the firms to make sure that this condition does not hold? How is that related to the elasticity calculation we made for the market demand/individual demand curve? e- How does the q* under monopoly compare with the q that would give us the social optimum. How is it related to the incentive structure for a monopoly?
- What is the metric designator for a raceway of trade size 3? C. 41 12 d. 78 21 a. b. 10002Required information Skip to question An image shows the curves of MSC, MPC, MSB and MPB. Image shows the bar graph which represents the curves of MSC, MPC, MPS, MPB and these cross each other's. At x- axis shows the Quantity per period and at y-axis shows the Price in dollar. Refer to the above graph to answer this question. If this product were taxed by an amount equal to the external costs, what would be the total amount of tax revenue? Multiple Choice $14,000. $ 10,000. $6,000 $8,000. $16,000. Required information Required information Price $100 90 80 70 60 50 40 30 20 10 0 200 400 600 800 MSC MPC MSB MPB 1000 1200 1400 Quantity per periodEconomics
