The following table shows the private value, private cost, and external cost for various quantities of output in a market. Table 2 Quantity Private Value Private Cost External Cost 1 $14 $10 $2 2 13 11 2 3 12 12 2 4 11 13 2 5 10 14 2 6 9 15 2 7 8 16 2 -Refer to Table 2. What is the equilibrium quantity of output in the market? -Refer to Table 2. What is the socially-optimal quantity of output in this market? -Refer to Table 2. How large would a corrective tax need to be to move this market from the equilibrium outcome to the socially-optimal outcome? -Refer to Table 2. Which of the following statements is correct? a-A tax of $4 per unit would enable this market to move from the equilibrium quantity of output to the socially optimal level of output. b-If the external benefit per unit of output were $0 instead of $2, then the socially efficient quantity of output would be 4 units. c-Taking the external cost into account, total surplus declines when the 3rd unit of output is produced and consumed. d-The market for flu shots is a market to which the concepts in this table apply very well.
The following table shows the private value, private cost, and external cost for various quantities of output in a market. Table 2 Quantity Private Value Private Cost External Cost 1 $14 $10 $2 2 13 11 2 3 12 12 2 4 11 13 2 5 10 14 2 6 9 15 2 7 8 16 2 -Refer to Table 2. What is the equilibrium quantity of output in the market? -Refer to Table 2. What is the socially-optimal quantity of output in this market? -Refer to Table 2. How large would a corrective tax need to be to move this market from the equilibrium outcome to the socially-optimal outcome? -Refer to Table 2. Which of the following statements is correct? a-A tax of $4 per unit would enable this market to move from the equilibrium quantity of output to the socially optimal level of output. b-If the external benefit per unit of output were $0 instead of $2, then the socially efficient quantity of output would be 4 units. c-Taking the external cost into account, total surplus declines when the 3rd unit of output is produced and consumed. d-The market for flu shots is a market to which the concepts in this table apply very well.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
The following table shows the private value, private cost, and external cost for various quantities of output in a market.
Table 2
|
Quantity |
Private Value |
Private Cost |
External Cost |
|
1 |
$14 |
$10 |
$2 |
|
2 |
13 |
11 |
2 |
|
3 |
12 |
12 |
2 |
|
4 |
11 |
13 |
2 |
|
5 |
10 |
14 |
2 |
|
6 |
9 |
15 |
2 |
|
7 |
8 |
16 |
2 |
-Refer to Table 2. What is the equilibrium quantity of output in the market?
-Refer to Table 2. What is the socially-optimal quantity of output in this market?
-Refer to Table 2. How large would a corrective tax need to be to move this market from the equilibrium outcome to the socially-optimal outcome?
-Refer to Table 2. Which of the following statements is correct?
a-A tax of $4 per unit would enable this market to move from the equilibrium quantity of output to the socially optimal level of output.
b-If the external benefit per unit of output were $0 instead of $2, then the socially efficient quantity of output would be 4 units.
c-Taking the external cost into account, total surplus declines when the 3rd unit of output is produced and consumed.
d-The market for flu shots is a market to which the concepts in this table apply very well.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education