The graph below shows a market with a certain externality. S denotes the private cost of producers and D denotes the private value ofconsumers in this market. Without any intervention the total surplus is equal toPHS+ External CostESSC0(KGO)(KIE)O (KGO) - (IJG)O (KIE) - (JIG)DQ

The correct answer is (KGO)-(IJG).The total surplus is the sum of the consumer surplus and the…

Answered: The graph below shows a market with a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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This graph depicts an externality in a specific market: PMC represents the private marginal cost curve while SMC represents the social marginal cost curve: Price PMC ΠΟ F D A H /SMC Demand Quantity
Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC_1 = 11 - 2E_1 MAC_2 = 8.5 - E_2, and assume marginal external damages (MED) from the aggregate emissions of both firms (E_Agg = E_1 + E_2) is: MED = .5E_Agg. To achieve the socially efficient level of aggregate emissions (E*_Agg), the government institutes a per-unit tax on emissions. In principle, firms could continue to emit pollution as they were in the absence of government intervention, but by cutting back on emissions, their total compliance costs (tax payment plus total abatement costs) goes down. How much money can firms save if they reduce their emissions to E*_Agg in response to the tax? Answer:
(Figure: Nail Polish Externalities) In the figure, Sp (MPC) represents the private supply curve of a particular type of nail polish, whose manufacture is associated with the release of toxic chemicals into the atmosphere. SS (MSC) includes the costs of that toxicity borne by others. What area represents the total externality cost of this nail polish? a) abdc b) abef c) defc d) the total externality cost is unknown. (the answer is NOT b)
There are two identified externalities involved with pig farming. What are they?
Positive externality No externality Negative externality Answer Bank The U.S. government decides to Lyle and Julia from The hing company icago house all of its nuclear waste to Los Angeles with their newborn infant who cries the entire way illegally hunts the Coelacanth, material at Cactus Cliff, WY. As a critically endangered fish that is close to extinction with all nuclear waste, there is no fail-safe protection method Jane raises bees to produce honey Ronald, the first in his family to attend for her business, but her bees also college, graduates from medical school pollinate many flowers in the neighborhood where she lives. and decides to return home to work as a doctor in his old neighborhood.
Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC_1 = 11 - 2E_1 MAC_2 = 8.5 - E_2, and assume marginal external damages (MED) from the aggregate emissions of both firms (E_Agg = E_1 + E_2) is: MED = .5E_Agg. To achieve the socially efficient level of aggregate emissions (E*_Agg), the government institutes a per unit subsidy to abatement equal to $____. Answer:
Consider two firms with the following marginal abatement costs (MAC) as a function of emissions (E): MAC_1 = 24 - 2E_1 MAC_2 = 20 - E_2, and assume marginal external damages (MED) from the aggregate emissions of both firms (E_Agg = E_1 + E_2) is: MED = 2E_Agg. To achieve the socially efficient level of aggregate emissions (E*_Agg), the government institutes a cap and trade policy and sets the cap equal to the socially efficient level of emissions (E*_Agg). If firm 2 is initially grandfathered 5 permits, it will buy more permits. (Note: your answer can be positive or negative; if it is positive, the firm is buying additional permits; if it is negative, the firm sells permits. So, for example, an answer of -10 implies that the firm sells 10 permits)
The market for plasticans is perfectly competitive. Market Supply is given by Q=6P and Market Demand is given by Q=487-3P. Each extra unit of plastican produced imposes a negative externality of $5. What is the total cost of the externality at the market equilibrium? Enter a number only, no $ sign. Do NOT include a negative sign. 1,623.33
Describe a situation where you experienced a positive or negative externality or free-riding by you or someone else. Why are these situations problematic?
None
Don't copy answer any site otherwise I will report
(a) Explain the difference between a positive externality and a negative externality and why each result in an equilibrium point that is not optimal for society. (b) which externality results in an equilibrium quantity that is higher than the optimal social quantity of a good? (c) how can the impact of the externality in part b be corrected?

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The graph below shows a market with a certain externality. S denotes the private cost of producers and D denotes the private value of consumers in this market. Without any intervention the total surplus is equal to P H S+ External Cost E S S C 0 (KGO) (KIE) O (KGO) - (IJG) O (KIE) - (JIG) D Q