Suppose that the marginal private benefit of compliance Is MPB = 90 - Q and the marginal private cost of compliance is There are no externalities with respect to compliance. 2Q where , is the compliance rate. MPC = In general, the efficient rate of compliance is __ because to increase the compliance rate the society must divert resources from other _ uses. equal to 100 %; socially desirable less than 100 %; socially undesirable equal to 100 %; socially undesirable

Suppose that the marginal private benefit of compliance Is MPB = 90 - Q and the marginal private cost of compliance is There are no externalities with respect to compliance. 2Q where , is the compliance rate. MPC = In general, the efficient rate of compliance is __ because to increase the compliance rate the society must divert resources from other _ uses. equal to 100 %; socially desirable less than 100 %; socially undesirable equal to 100 %; socially undesirable

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume D1 reflects private benefits from consumption and assume S1 reflects private costs of production. If we begin with demand curve D1 and supply curve S1 in the figure above and external costs are incorporated into this market, then Group of answer choices government should subsidize its production and shift supply from S1 to S2. the vertical distance between S1 and S2 equals external costs. price will increase from P1 to P4. underproduction equals Q3 minus Q1. price will rise from P1 to P3.
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