Tammy enjoys fixing up old clocks, which she then sells for p. = 100 each. Her cost of fixing each clock is C(c) = 2c + 2. Her partner Marin fixesold watches, which she sells forPw65. The ticking of Tammy's clocks makes Marin less productive, so her cost per watch isC(w) = 3w ++ wc.How much should Tammy be taxed per clock in order to achieve the social optimum?a. $65b. $26O C. $23O d. $38

Tammy wants to maximize profit given by, π(c)=100c-2c-c2F.O.C100-2-2c=0c*=49 The social optimum is…

Tammy enjoys fixing up old clocks, which she then sells for p. = 100 each. Her cost of fixing each clock is C(e) = 2c + c2. Her partner Marin fixes old watches, which she sells for Pu = 65. The ticking of Tammy's clocks makes Marin less productive, so her cost per watch is w? + wc. How much should Tammy be taxed per clock in order to achieve the social optimum? 2 C(w) = 3w + O a. $65 O b. $26 OC. $23 O d. $38

Tammy enjoys fixing up old clocks, which she then sells for p. = 100 each. Her cost of fixing each clock is C(e) = 2c + c2. Her partner Marin fixes old watches, which she sells for Pu = 65. The ticking of Tammy's clocks makes Marin less productive, so her cost per watch is w? + wc. How much should Tammy be taxed per clock in order to achieve the social optimum? 2 C(w) = 3w + O a. $65 O b. $26 OC. $23 O d. $38

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

If the equilibrium quantity of a good is also the socially optimal quantity, then: Multiple Choice the marginal benefit to consumers of another unit of the good is zero. the marginal cost to producers of another unit of the good is zero. total economic surplus has been maximized. it's possible to make at least one person better off without hurting anyone else.
Which of the following statements is correct? a.) Economic analyses can often do a reasonable job of evaluating the net benefits from some re-allocation of environmental resources. Policymakers should thus feel comfortable in choosing among alternative policies according to whichever one yields the highest net benefits. b.)Basic benefit-cost analysis, as typically practiced in the U.S., assumes that the marginal value of an extra dollar of net benefits is the same for everyone. c.)All socially optimal allocations are efficient, but the reverse is not true. d.)There is always a tradeoff between efficiency and equity. A reallocation of environmental resources that improves efficiency cannot also improve equity, and vice versa.
A local government is considering building new public hiking trails in town.Suppose that the trails are public goods. There are two types of people in a smalltown economy, 1000 avid hikers and 1000 non-hikers, who have typical individualmarginal benefit curves: MB_H = 350 − 5Q and MB_N = 240 − 6Q for the hikersand the non-hikers respectively, where Q is the miles of trails. On the same graph,draw the marginal benefit curves for each type of person and MB of the overalleconomy. If the marginal cost providing this public good is $27000 per mile whatis the optimal level of the public good?
You have the option to play tennis or a round of golf (but not both). The tennis match requires you to take 2 hours off from work and the round of golf requires you to take 4 hours off from work. Playing tennis has value to you equal to $70, while golf has value to you equal to $105. Tennis courts are publicly available at no cost, but golf costs $20 per round. Suppose your wage from working is $12 per hour. Part 2 The net benefit from playing tennis is $ enter your response here and the net benefit from playing golf is $ enter your response here. (Enter your responses as integers.)
Pam is a paper salesperson and also an excellent typist. She can type 120 words per minute, but can rack up $80 per hour in sales. Erin would like some typing work but can only type 30 words per minute. Economic efficiency suggests O Pam should always do the typing because she can type faster. Erin should do the typing, provided she is willing to do so for less than $40 per hour. O Erin should do the typing, provided she is paid more than $40 per hour. O Erin should do the typing, provided she is willing to do so for less than $20 per hour.
Thelma owns a cat which wakes up her roommate Louise at 6am every morning. Thelma enjoys cat ownership, but Louise bears a cost of Thelma's ownership of the cat. Assuming that Louise has the legal right to sleep as long as she likes, which action is necessary? if Thelma's benefit exceeds Louise's cost, government intervention is necessary if Louise's cost exceeds Thelma 's benefit, Thelma will pay Louise to keep her cat Thelma will pay Louise to be able to keep the cat if her benefit exceeds Louise's cost if Louise has the legal right to sleep, she only has to pay Thelma when her cost is below Thelma's benefit
1
A medical researcher is trying to cure a disease. For each unit of effort she puts into her work, she generates a utility benefit of 10 for each member of society. There are 1,000 people in society besides the medical researcher. The medical researcher doesn’t care about other people. She is in it for the glory. For each unit of effort she puts into her work, she gets a utility benefit of 1000 (which is inclusive of the 10 that she gets for being a member of society, plus a payoff of 990 in glory). If she exerts effort e, she also suffers cost e^2. (a) Suppose a policymaker who was a committed utilitarian (including caring about the medical researcher’s glory, since the medical researcher cares about it) was to choose the level of effort the medical researcher exerts. That policymaker would add up the total utility in society (including the medical researcher’s utility) from any given level of effort and choose the level of effort that maximizes that aggregate utility. i. What (social)…
Jonathan, Scott and Mitchell share a garage. All enjoy having the garage cleaned, regardless of who pays for cleaning. The graph below represents Jonathan, Scott and Mitchell’s individual demand for garage cleaning. The marginal cost of cleaning $3 per hour. The Lindahl prices for Jonathan, Scott and Mitchell are, respectively, $68/17, $17/17, and $4/85 per hour. $34/17, $17/17, and $0 per hour. None of these. $30/17, $15/17, $6/17 per hour. $0, $0, and $0 per hour.
Beef production is known to generate a lot of methane (from the digestive system of cattle), which is harmful to the environment. If the government levies an environmental tax on beef discuss how it would affect income distribution.
Consider the model of a rational consumer that cares about consumption of private goods and consumption of broadcast public television (a public good). Suppose that the total level of broadcast public television provided through voluntary contributions is 10 hours of programming. Then the government decides to raise money through a tax and provide 10 hours of programming to the public. What would we predict about crowd-out of voluntary contributions to broadcast public television when government does this? How would the answer change if consumers get warm glow utility from donating to broadcast public television in addition to utility from the public television itself? (Be specific.)
Suppose 20 people each have the demand Q = 20 - Pfor streetlights, and 5 people have the demand Q = 18 - 2P for streetlights. The cost of building each streetlight is $10. If it is impossible to purchase a fractional number of streetlights, how many streetlights are socially optimal?