The graph shows the marginal private benefit from trade school education. The marginal - cost of this education is a constant $12,000 a year and the marginal external benefit is $8,000 per student per year. Draw the marginal social benefit curve. Label it MSB. Draw a point at the efficient outcome. Label it 1. The efficient number of students is >>> Remember that the quantity given on the x-axis is in thousands of students. Suppose trade schools are private (no government involvement). Draw a point at the private market outcome. Label it 2.. If trade schools are private, people undertake a trade school education and tuition is $a year. >>> Remember that the quantity given on the x-axis is in thousands of students and the price on the y-axis is in thousands of dollars. If there is no goverment involvement, calculate the deadweight loss to society. DWL=5 Draw a shape to shade the deadweight loss area on the graph. Price and cost (thousands of dollars) 324 28- 24- 20 164 12 ddu 8- 4-4 0- S MC DEMB 0 20 40 60 80 100 120 140 Students (thousands per year) >>> Draw only the objects specified in the question. Next

The graph shows the marginal private benefit from trade school education. The marginal - cost of this education is a constant $12,000 a year and the marginal external benefit is $8,000 per student per year. Draw the marginal social benefit curve. Label it MSB. Draw a point at the efficient outcome. Label it 1. The efficient number of students is >>> Remember that the quantity given on the x-axis is in thousands of students. Suppose trade schools are private (no government involvement). Draw a point at the private market outcome. Label it 2.. If trade schools are private, people undertake a trade school education and tuition is $a year. >>> Remember that the quantity given on the x-axis is in thousands of students and the price on the y-axis is in thousands of dollars. If there is no goverment involvement, calculate the deadweight loss to society. DWL=5 Draw a shape to shade the deadweight loss area on the graph. Price and cost (thousands of dollars) 324 28- 24- 20 164 12 ddu 8- 4-4 0- S MC DEMB 0 20 40 60 80 100 120 140 Students (thousands per year) >>> Draw only the objects specified in the question. Next

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that demand for anchovy pizza is given by PD=50−QD, and the supply of anchovy pizza is given by PS=QS. Anchovy pizza smells bad. The bad smell imposes an external cost on anyone near the pizza equal to $5 per pizza. If the government wanted to correct the externality in the market for anchovy pizza and induce it to produce the socially efficient quantity of pizza, which policy should it adopt?
Please solve for d) e) and f).
Consider a market with the following supply and demand. (It may help to draw a graph for these questions.) P 5 6 7 8 9 10 11 12 13 14 QS 200 300 400 500 600 700 800 900 1000 1100 QD 800 750 700 650 600 550 500 450 400 350 If there is an external cost of $3, what is the efficient quantity? If there is an external benefit of $3, what is the efficient quantity? For the remaining questions assume that there is a $3 external COST. If the government wants to get the efficient quantity with a per/unit tax, how much should the tax be? Now imagine that they use tradable allowances. If they cap the quantity at 400 what would the value of these allowance be in the market? (Assume the market is perfectly competitive and that "one allowance" lets you…
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Consider a market with the following supply and demand. (It may help to draw a graph for these questions.) P 5 6 7 8 9 10 11 12 13 14 QS 200 300 400 500 600 700 800 900 1000 1100 QD 800 750 700 650 600 550 500 450 400 350 If there is an external cost of $3, what is the efficient quantity? If there is an external benefit of $3, what is the efficient quantity? For the remaining questions assume that there is a $3 external COST. If the government wants to get the efficient quantity with a per/unit tax, how much should the tax be? Now imagine that they use tradable allowances. If they cap the quantity at 400 what would the value of these allowance be in the market? (Assume the market is perfectly competitive and that "one allowance" lets you…
Can you answer this?
Can you answer this?
Suppose the demand for an industrial product is given by P equals 300 minus 2 Q , and the supply is given by P equals Q . Suppose that the pollution due to the production of this good imposes a per unit cost of c equals 3 on society. What type of externality is this, and what curve represents this externality being accounted for (social cost or social demand curve)? A. This is a positive production externality. The social supply curve would be P equals 3 plus Q. B. This is a negative consumption externality. The social demand curve would be P equals 97 minus Q. C. This is a negative production externality. The social supply curve would be P equals 3 plus Q. D. This is a positive consumption externality. The social demand curve would be P equals 103 minus Q.
ayor Grinch imposes a $1 tax on each bottle of Zlurp. Consumption per person is now bottles. This yields a per-person consumer surplus of not including the cost of pollution, a per-person external cost of , and government revenue of per person. Total surplus per person is now as a result of this policy. (Hint: Total surplus is equal to consumer surplus minus the external cost of pollution plus government revenue.) Based on your calculations, you support the mayor's policy because it welfare compared to before the tax.
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What is the socially optimal quantity, and how much is the social cost at this quantity?