The following problem consist of two parts. First, a short description of a certain mi- croeconomic situation with assumptions and considerations is presented. Second, two statements are made about the situation. You have to identify whether each statement is true or false and elaborate why you assess each statement the way you do. A factory is situated next to a dormitory for nurses who work night shifts. The factory produces 120 units of humanoid robots a day. The production process is rather noisy, and the nurses often complain that their sleep is disturbed. The following graph depicts the marginal private costs (MPC) and marginal social costs (MSC) of the robot factory production. The robot market is competitive and the market price is £340. Based on this information, which of the following statements are correct? Which are false? Statement 1: At Q = 120, both the factory and the nurses would benefit from the nurses paying a fee less than 120 to the factory to reduce output. Statement 2: The efficient level of output is 0, where there is zero marginal external cost to the nurses.

The following problem consist of two parts. First, a short description of a certain mi- croeconomic situation with assumptions and considerations is presented. Second, two statements are made about the situation. You have to identify whether each statement is true or false and elaborate why you assess each statement the way you do. A factory is situated next to a dormitory for nurses who work night shifts. The factory produces 120 units of humanoid robots a day. The production process is rather noisy, and the nurses often complain that their sleep is disturbed. The following graph depicts the marginal private costs (MPC) and marginal social costs (MSC) of the robot factory production. The robot market is competitive and the market price is £340. Based on this information, which of the following statements are correct? Which are false? Statement 1: At Q = 120, both the factory and the nurses would benefit from the nurses paying a fee less than 120 to the factory to reduce output. Statement 2: The efficient level of output is 0, where there is zero marginal external cost to the nurses.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
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