The diagram below gives informetion about demand and supply for robots in Econtand. 14 13 12 11 10 $ 9 8. 6. 4 3 2 0. 01234 567 89 10 Suppose that each robot in Econland creates a $5 positive externality because of how they make neighborhoods a safer place. What is the consumer surplus of Econland in the free market? (Note: A common question here is whether you should include the externality or not. This is part of this question for you to decide on whether to do so or not.) O-12.5 O 37.5 O 17.5 O 7.5 O 12.5 SI

The diagram below gives informetion about demand and supply for robots in Econtand. 14 13 12 11 10 $ 9 8. 6. 4 3 2 0. 01234 567 89 10 Suppose that each robot in Econland creates a $5 positive externality because of how they make neighborhoods a safer place. What is the consumer surplus of Econland in the free market? (Note: A common question here is whether you should include the externality or not. This is part of this question for you to decide on whether to do so or not.) O-12.5 O 37.5 O 17.5 O 7.5 O 12.5 SI

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The diagram below gives information about demand and supply for robots in Econtand. 14 12 11 10 $ 9 6. 0 12 345 67 8 9 10 Suppose that each robot in Econland creates a S6 positive externality because of how they make neighborhoods safer. If the government imposes the Pigouvian policy (the tax e total surplus as a result of this policy? subsidy that will maximize total surplus), what would be the change in O $9 O +$9 O $18 O no change in total surplus from this policy O +$18 32109876543210
Consider a manufactured good whose production process generates pollution. The demand for the product is Q=100-3P. The market supply function is Q=P. The marginal external cost is MEC=2Q. What is the emissions tax that needs to be imposed to achieve the social optimum? Illustrate on graph What is the economic incidence of this emissions tax? In other words, what proportion of this tax will be paid by producers of this product and what proportion of the tax will be paid by consumers?
By imposing a tax on the production of electricity equal to the cost of acid rain, the government will cause electric utilities to internalize the externality. As a consequence, the cost of the acid rain will become a OA. social cost borne by the public, and the demand curve for electricity will shift down. OB. social cost borne by the public, and the demand curve for electricity will shift up. C. private cost borne by the utilities, and the supply curve for electricity will shift down. D. private cost borne by the utilities, and the supply curve for electricity will shift up. Question Viewer
Let Q be the quantity of natural gas in tons from fracking. Assume fracking imposes a negative externality of $24 per ton. The private demand for natural gas from fracking is P = 200 - 4Q while the private supply curve is P = 20 + 2Q. If the government imposes a $24 tax per ton of natural gas from fracking, what is the change in the total surplus from before to after the imposition of the tax? O -$672. O $48. O $672. -$48.
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Some economists think that gas taxes in Europe, averaging around $2.50 per gallon, are too high from the perspective of economic efficiency. Suppose that this is true, and that social welfare could be increased with slightly lower gas taxes. Present a welfare analysis graph of the gasoline market in Europe with a gas tax that is too high. Identify five areas in your graph: 1. Consumer surplus 2. Producer surplus 3. Externality damage 4. Tax revenues 5. The potential welfare gain if taxes were lowered to the "correct" level.
Air horns impose many external costs on society: the risk of being deafened, the annoyance of being awakened in the middle of the night, and so on. Therefore, the market equilibrium quantity of air horns is not equal to the socially optimal quantity. The following graph shows the demand for air horns (their private value), the supply of air horns (the private cost of producing them), and the social cost of air horns, including both the private cost and external costs. Use the black point (plus symbol) to indicate the market equilibrium quantity. Next, use the purple point (diamond symbol) to indicate the socially optimal quantity.
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2. Table: The following table shows the private value, private cost, and social value for a market with a positive externality. Quantity Private Value Private Cost Social Value 27 6 34 12 24 10 31 13 21 14 28 14 18 18 25 15 15 22 22 12 26 19 a. What is the market equilibrium quantity of output for this product? b. What is the socially-optimal level of output in this market? c. How large would a per unit subsidy need to be in this market to move the market from the equilibrium level of output to the socially-optimal level of output?
I Price and cost (thousands of dollars per student) 20 16 12 8 0 200 A) 0 students; 400 students B) 600 students; 600 students C) 400 students; 600 students D) 600 students; 400 students E) 400 students; 400 students S = MC MSB MB 400 600 800 1,000 Quantity (students per year) 35) 35) The figure above shows the market for private elementary school education in Chicago. There is no external cost of private elementary education. If the government does not intervene in this market, the equilibrium number of students being privately educated is and the efficient quantity is
2) The following table shows how the marginal benefit of a service varies for five consumers. Quantity 1 4 Serkan 150 125 100 75 Asuman 125 100 75 50 Bahar 100 75 50 25 Murat 200 150 125 125 Meriç 600 400 200 150 a) Derive the demand curve for this service assuming that it is a public good. b) If marginal cost of the good is 850, what is the efficient output of the public good? c) If marginal cost of the good is 425, what is the efficient output of the public good? d) If marginal cost of the good is 850, what is the efficient output assuming it is private good?