The graph shows the demand for design school education. The marginal cost of this education is a constant $4,000 per student per year and the marginal external benefit is a constant $3,000 per student per year. If the government provides public design schools, what tuition will achieve the efficient number of students? How much will taxpayers have to pay? Draw the marginal social cost curve. Label it MSC. Draw the marginal social benefit curve. Label it MSB. Draw a line that shows the tuition that schools charge to achieve the efficient number of students. Label it Tuition. The tuition that colleges charge is $.000 per student. The amount paid by taxpayers is $.000 per student. 144 124 10- 8- 6- 4- 24 Price and cost (thousands of dollars) X MSB D-MB 20 40 60 80 100 120 140 Students (thousands per year). I Q Q G (0,0) >>> Draw only the objects specified in the question.

The graph shows the demand for design school education. The marginal cost of this education is a constant $4,000 per student per year and the marginal external benefit is a constant $3,000 per student per year. If the government provides public design schools, what tuition will achieve the efficient number of students? How much will taxpayers have to pay? Draw the marginal social cost curve. Label it MSC. Draw the marginal social benefit curve. Label it MSB. Draw a line that shows the tuition that schools charge to achieve the efficient number of students. Label it Tuition. The tuition that colleges charge is $.000 per student. The amount paid by taxpayers is $.000 per student. 144 124 10- 8- 6- 4- 24 Price and cost (thousands of dollars) X MSB D-MB 20 40 60 80 100 120 140 Students (thousands per year). I Q Q G (0,0) >>> Draw only the objects specified in the question.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the above graph. Is there an externality present in this market? If so, what kind? No, there is no externality. Yes, a negative externality. Yes, a positive externality.
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Define the concept of a negative externality and explain the nature of the negative externality in the fishing markets i.e. describe how the self-interested actions of a fishing company might adversely affect third parties without their consent.
The following graph represents the market for high-emissions cars. Answer this question assuming that the externality is not internalised. Which quantity is socially optimal (i.e. what is the efficient quantity)? What is the deadweight loss generated by the externality?
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The graph shows the marginal private benefit from a veterinary degree and the marginal cost of obtaining it. The marginal external benefit is $8,000 per veterinary graduate per year. Suppose the government decides to subsidize private veterinary schools. Draw the marginal social benefit curve. Label it MSB. Draw the supply curve when the government provides a subsidy that achieves the efficient number of students. Label it S - MC. Draw an arrow to show the subsidy per student at the efficient number of students. The subsidy that achieves the efficient number of students is $ student. >>> Remember that the quantity given on the y-axis is in thousands of dollars. Oll 70 y Selected: none & 7 O * 8 per 0 * ✓ O 9 40- 32- 24- 16- 8- 0- 0 Price and cost (thousands of dollars) 4 F 10 40 30 Students (thousands per year) >>> Draw only the objects specified in the question. Delete Clear Р 20 +S=MC ? D=MB 50 Next 18 X SU 10
subject:eco
Consider the market for steel. Suppose that a steel manufacturing plant dumps toxic waste into a nearby river, creating a negative externality for those living downstream from the plant. Producing an additional ton of steel imposes a constant external cost of $165 per ton. The following graph shows the demand (private value) curve and the supply (private cost) curve for steel. Use the purple points (diamond symbol) to plot the social cost curve when the external cost is $165 per ton. 1100 990 Social Cost 880 770 Supply (Private Cost) 660 550 440 330 220 Demand 110 (Private Value) 1 2 4 7 QUANTITY (Tons of steel) PRICE (Dollars per ton of steel)
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