Ñ2 Suppose a factory produces widgetsand, in the process of doing so, alsoproduces pollution. The external costof the pollution per widget produced is$50. The demand, private cost, andsocial cost curves areDemandP = 600 - 3QPrivate CostPC = 20 + 2QSocial CostSC = 70 + 2Qa. Find the market equilibrium priceand quantity if there is no governmentintervention.b. Find the socially optimal price andquantity.c. What tax could the governmentimpose to get the efficient outcome?

given Demand = P = 600 – 3q Private cost PC = 20 + 2q Social cost SC = 70 + 2q (without…

Answered: Suppose a factory produces widgets and,…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Derive an expression for MC if TC = 49 - 20q² + 60q + 40. %3D
Consider the diagram: FF (10% interest rate) FF (78% interest rate) Julia's 100 endowment 38 36 Julia's IC (higher utility) Julia's IC Julia's IC (through point F) Julia's IC (lower utility) 56 58 Consumption now (S) 35 91 Consumption later ($)
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A - 7% C D 5% 100 150 200 300 Money ($ million) 27) Refer to Figure 11.1. Suppose the Quantity of money demanded is currently at Point D. A movement to point C could be caused by A) a decrease in nominal output. C) an increase in the price level. B) an increase in the interest rate. D) a decrease in the interest rate. Interest rate (%)
Suppose that average labor productivity in Country B is $7,000, and that Countries B and E have the same real GDP per capita. Based on the information in the table, what must be the average labor productivity in Country E? Country A B CDE E Population (millions) 100 150 75 250 95 Multiple Choice O $9,625 Share of Population Employed (%) 60 55 50 45 40
s ae o .co7 .0o 0.00m 1.000 2.000 .000 4.000 s.000 6.000 7 oos s.c00 s.c00.000 Oae 0e 3.000 4.000 s.000 .000 7 p00 .0000ce s0.000 1.000 2.000 3.000 4.000 6.000 6.000 7.000 8.000 9.000 10.000 (Figure: Market Supply Curve) The Accompanying graph contain individual supply curves for the only two firms in a market. Which of the market supply curve is correct? Graph D O None of these options is correct. O Graph C O Graph B O Graph A
You are considering adding a new software title to those published by your highly successful software company. If you add the new product, it will use capacity on your disk duplicating machines that you had planned on using for your flagship product, "Battlin' Bobby." You had planned on using the unused capacity to start selling "BB" on the West coast in two years. You would eventually have had to purchase additional duplicating machines 10 years from today, but using the capacity for your new product will require moving this purchase up to 2 years from today. If the new machines will cost $115,000 and can be expensed under Section 179, your marginal tax rate is 21 percent, and your cost of capital is 16 percent, what is the opportunity cost associated with using the unused capacity for the new product? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) Opportunity cost
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P(s/1b) $10 $8 $5 A B 20 50 80 Q(lbs) Refer the figure in the diagram. The movement of point a to point b (or vice versa) represents: a shift in supply O a change in demand a shift of demand a change in quantity demanded O 0
A consulting company estimated market demand and supply in a perfectly competitive industry and obtained the following results: Qd =25,000-5,000P+ 25M Q=240,000+ 5,000P-2,000P, where Pis price. Mis income, and P;is the price of a key input. The forecasts for the next year are M-$15,000 and P, $20. Average variable cost is estimated to be AVC-14-0.008Q+0.0000020² Total fixed cost will be $6,000 next year. Suppose that income for next year is forecasted to be $9,000 instead. What is the profit-maximizing output choice for the firm?

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