Suppose electricity generates a negative externality in production. If so, thenO A. the marginal social benefit of electricity is less than the marginal private benefit.O B. the marginal social cost of electricity equals the marginal private cost.Oc. the marginal social cost of electricity equals the marginal social benefit.O D. the marginal social cost of electricity is less than the marginal private cost.O E. the marginal social cost of electricity is greater than the marginal private cost.

In an economy, negative externality refers to the adverse impact of an individual's action on the…

Answered: Suppose electricity generates a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Only typed answer You are an industry analyst that specializes in an industry where the market inverse demand is P = 100 - 3Q. The external marginal cost of producing the product is MCExternal = 6Q, and the internal cost is MCInternal = 14Q. Instruction: Round your answers to the nearest two decimal places. a. What is the socially efficient level of output? units b. Given these costs and market demand, how much output would a competitive industry produce? units c. Given these costs and market demand, how much output would a monopolist produce? units d. Which of the following are actions the government could take to induce firms in this industry to produce the socially efficient level of output. Instructions: You may select more than one answer. Click the box with a check mark for the correct answers and click twice to empty the box for the wrong answers. You must click to select or deselect each option in order to receive full credit. Pollution taxes…
According to economists what is the optimal amount of pollution? O a. The optimal amount of pollution is where private costs equal social costs O b. Pollution should be reduced to a level as determined by government regulation O c. None, the goal is to completely eliminate pollution d. The point where the marginal benefit from further pollution reduction equals the marginal cost of further reduction
dont use chatgpt i will 10 upvote
1. Positive externality from consumption Forgone benefit to society of the externality-Deadweight loss Price $80 In thousands) го 00 50 40 30 20 10 MSB Marginal benef +Marginal external benef D Marginal benefit 10 20 30 40 60 90 700 Quantity In millions of years a. Calculate the deadweight loss caused by the positive externality. b. If the government wants to solve this externality using mandated production, how much should it be c. If the government wants to solve this externality using a Pigou subsidy, how much should it be? II. Negative externality from production Price $0.40 (per Wh 0.30 0.25 -0.30 0.15 0.10 MSC Marginal cost Merpinal external cost Marginal cost 100 200 300 400 500 600 700 800 Quantity Inbo of kn a. Calculate the deadweight loss caused by the negative externality. b. If the government wants to solve this externality using quota, how much should it be? c. If the government wants to solve this externality using a Pigou tax, how much should it be?
1. True or False d. In the presence of an unpriced negative externality such as roadway congestion, marginal private benefit will be less than marginal social cost. e. The optimal level of roadway congestion is zero. f. The optimal congestion toll on a road would be the difference between marginal benefit and marginal private cost at the optimal level of road usage.
urco Use the chart below to answer the following question. The Socially Optimal Quantity of Pollution Select one: O a. $83 O b. $250 O c. $500 O d. $167 Marginal social cost, marginal social benefit $500 250 167 0 MSC MSB 83 125 Quantity of pollution The chart above shows the marginal social cost (MSC) and marginal social benefit (MSB) of pollution. Using the information provided in the figure, we can conclude the optimal Pigouvian tax per unit of pollution is:
Given the both answer..
2. Consider the following free market. $300 $200 $100 500 1200 Quantity i. Calculate consumer and producer surplus in this market. ii. If the marginal external cost of production is $10, the socially optimal quantity is 400 and the socially optimal price is $205. Show the new consumer and producer surplus and calculate them. Also show the deadweight loss on the graph and calculate it.
11.00 10.00 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 8 1.00 300 600 900 What kind of externality is depicted above? O a. A negative production externality O b. A positive consumption externality c. A positive production externality d. A negative consumption externality Demand 1200 1500 1800 2100 Supply Marginal Social Benefit 2400
The market below depicts supply, demand and marginal social cost in the widget market. 1.00 HA 0.90 0.80 0.70 0.00 0.50 0.40 0.30 020 H 25 50 75 Pemi I 100 125 150 175 200 To correct for the externality, what should be used? O a. A subsidy of $0.20 b. A tax of $0.20 OC. A subsidy of $0.30 Od. A tax of $0.30
An external cost arises from the use of fossil fuels because of global warming. If fossil fuels are sold in a competitive market, A. The marginal social cost of fossil fuels will exceed their marginal private cost. B. The marginal social cost of fossil fuels will be less than their marginal private cost C. The marginal social benefit of fossil fuels will exceed their marginal social cost D. a and b E. b and c
Solve D) and last part only in typed answer You are an industry analyst that specializes in an industry where the market inverse demand is P = 100 - 3Q. The external marginal cost of producing the product is MCExternal = 6Q, and the internal cost is MCInternal = 14Q. Instruction: Round your answers to the nearest two decimal places. a. What is the socially efficient level of output? units b. Given these costs and market demand, how much output would a competitive industry produce? units c. Given these costs and market demand, how much output would a monopolist produce? units d. Which of the following are actions the government could take to induce firms in this industry to produce the socially efficient level of output. Instructions: You may select more than one answer. Click the box with a check mark for the correct answers and click twice to empty the box for the wrong answers. You must click to select or deselect each option in order to receive full credit.…

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