QUESTION 6Figure 10-3PRICE00022222S2018161410864Social ValueDemand,246 8 10 12 14 16 18 20QUANTITYRefer to Figure 10-3. If the government wanted to tax or Iubsidize this good to achieve the socially optimal level of output, it woulda introduce a subsidy of $2 per unit.Supplyb. impose a tax of $2 per unit.c. introduce a subsidy of $4 per unit.d, impose a tax of $4 per unit.

Externalities: When a firm produces a good sometimes it creates costs or benefits for other firms.…

Answered: QUESTION 6 Figure 10-3 PRICE 20 18 16…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consumer and Producer surplus Stax P $100 $70 $50 $45 $X $5 D 40 60 Assume an excise tax that has caused a decrease in Supply as shown on the graph above Show all work. а. How much is the tax per- unit b. How much is the value of X (intercept of the green line). How do you describe what that value is? C. How much is the consumer surplus before the tax? d. How much is producer surplus before the tax? е. How much is the consumer surplus after the tax? f. How much is producer surplus after the tax? g. How much is the deadweight loss as a result of the tax
(Figure: The Market for Season Passes to Amusement Parks) Use Figure: The Market for Season Passes to Amusement Parks. Suppose with no tax the equilibrium price is $110 and the equilibrium quantity is 250. If the government levies a tax of $30 per season pass purchased, the new equilibrium price will be and the new equilibrium quantity will be Price (per pass) S3 S₂ S₁ So $140 130 120 110 100 0 O $130; 150 O $110; 250 O $140; 100 O $120; 200 100 150 200 D 250 300 Quantity (per week) 7
4. Externalities - Definition and examples An externality arises when a firm or person engages in an activity that affects the well-being of a third party, yet neither pays nor receives any compensation for that effect. If the impact on the third party is beneficial, it is called a externality. The following graph shows the demand and supply curves for a good with this type of externality. The dashed drop lines on the graph reflect the market equilibrium price and quantity for this good. Shift one of the curves to reflect the presence of the externality. If there are external costs of production, then you should shift the supply curve to reflect the social costs of producing the good; similarly, if there are external benefits from production, then you should shift the demand curve to reflect the social benefits from consuming the good. PRICE (Dollars per unit) QUANTITY (Units) Supply Demand O Demand -- Supply ? With this type of externality, in the absence of government intervention,…
In the figure to the right, Tupak's consumer surplus is $ 6 compared to Thurl's consumer surplus which is $ 3. Will Fivola demand lawn care at this price of $13? No How many lawns will be cut at this price of $13?
12
Question 2 The government has imposed an effective price control for an agricultural product of $12. The equilibrium price for this market is $8. Ainswer the followving question? a. Describle what type of price control is this? b. Draw the market (demand and supply) for this market and show the price control. c. What are the consequences of this price control
18. The next few questions are about this generic market with a negative consumption externality. Fill in the welfare table below with the areas associated with each welfare measure. aslhee or batoob A P. 1 F H. G MSB Q, Qi tax that leads to Qo CS PS tax revenue externality total surplus gqg 53 2Abbo20 (p re 9 boagns exrsLU ednsto 75 beLapor ent
H The figure below shows the market for snowboards in the state of Colorado, The Colorado state legislature has imposed a sales of tax on each snowboard sold. Assume that the pre-tax price of a snowboard was $50. After the tax, consumers are paying $55 per snowboard while firms are receiving $40 per snowboard. 110 3-10 $10 X Quality (0) The amount of the tax on each unit of the good that is sold is $30 $15 $5 $20 Dead $10
36 Social Cost 30 30 24 24 18 PRICE (Dollars per unit) 2 6 Supply Demand H 100 200 300 400 500 600 QUANTITY (Units of plastic) Refer to Figure 10-6. In order to reach the social optimum, the government could O impose a tax of $3 per unit on plastics. impose a tax of $9 per unit on plastics. O impose a tax of $12 per unit on plastics. Ooffer a subsidy of $9 per unit on plastics.
a. Use the data below to derive the demand schedule for a public good. Instructions: Enter your answers as whole numbers. Demand Individual #1 Individual #2 Individual #3 Public Good Price Qd Price Qd Price Qd Price Qd $8 $8 1 $8 0 1 7 7 2 0 2 7 6 6 1 3 5 1 5 2 4 5 4 2 4 4 3 5 3 3 3 6 3 4 6 4 2 2 7 2 5 7 1 1 8 8 5 1 b. Using the following supply schedule, determine the optimal quantity of this public good. Quantity Supplied Price $19 10 16 8 13 6 4 10 7 2 4 1 co LC LC cC LO LC
1. Externalities - Definition and examples An externality arises when a firm or person engages in an activity that affects the wellbeing of a third party, yet neither pays nor receives any compensation for that effect. If the impact on the third party is adverse, it is called a externality. The following graph shows the demand and supply curves for a good with this type of externality. The dashed drop lines on the graph reflect the market equilibrium price and quantity for this good. Adjust one or both of the curves to reflect the presence of the externality. If the social cost of producing the good is not equal to the private cost, then you should drag the supply curve to reflect the social costs of producing the good; similarly, if the social value of producing the good is not equal to the private value, then you should drag the demand curve to reflect the social value of consuming the good. ? PRICE (Dollars per unit) QUANTITY (Units) Supply Demand Demand Supply With this type of…
O Macmillan Learning Using the information in the graph, answer the three questions. What is the value of the efficient per-unit tax at the socially optimal equilibrium? What are tax revenues at the socially optimal equilibrium, in millions? Price and cost (per pound) $20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 1 I 1 1 1 L 1 1 1 1 T per-unit tax: $ T F T tax revenues: $ 1 1 i 1 T 1 1 1 1 T T I I I Social marginal cost Private marginal cost 1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Fertilizer (millions of pounds per year) Demand

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