The knowledge that you possess about your driving habits that your insurance company does not possess is an example of OA. intellectual property OB. private information OC. the opportunity cost of driving On an externality I
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- Marginal Benefit (MB) MBBETA to Firm MBALPHA Tax = $100 25 50 75 100 Emissions (tons) Figure 16.5 Figure 16.5 shows the marginal benefits of emitting pollution for the only two chemical companies in an industry, Alpha Chemicals and Beta Chemicals. Before any tax on pollution emissions is imposed, each company views pollution as being free. Refer to Figure 16.5. The government decides to impose a tax on pollution of $100 per ton of emissions. Which of the follow are true? (Select all that are true) O a. As a result of the tax, the total emissions will decrease by 50 units O b. As a result of the tax, both firms will decrease emissions by the same amount O c. As a result of the tax, Alpha will cut more emissions than Beta O d. Before the tax, Beta produced more emissions than Alpha O e. The amount of tax collected is $2500 O f. After the tax, Beta will produce 50 tons more than Alpha Og. The tax was intended to decrease production by 50 units for each firm. O h. As a result of the tax,…Determine the type of market failure represented by the scenario below. Buying a used appliance on Ebay Select one: O a. negative externality Ob. public good Oc positive externality O d. tragedy of the commons e. asymmetric informationAiticle Link: https://bit.lv/3fbNtrFe The following graph represents the market for high-emissions cars. Answer this question assuming that the externality is not internalised. Price of high tmiiees vekides Secial Value Babetty high emistions vehiles What is the private value of the last unit traded (or the willingness to pay of the marginal buyer) in the market? P1 O P2 O P3 P4
- Dollars Firm 2 60 60 MC 50 MC S0 40 40 30 30 20 20 10 10 Q1 0: Os Q, Q, Q. Q, Q, Q2 Q Q. Qs Q. Ahatemene Ahstement1. Governments and pharmaceutical companies rushed quickly ahead to develop a vaccine. Vaccinations and immunizations are examples of positive externalities. A positive externality is when an activity creates a benefit for those who are not involved in the transaction, a third party. Let’s examine the vaccination of Covid-19 as a positive externality. Question: Why is the Covid-19 vaccination considered a positive externality? 2. Considering the information provided and your responses to Question 3 explain the potential unintended consequences of each one of these polices. Which policy would you enact and why?500 450 The graph on the right may help in answering question 25 400 350 300 250 200 150 100 50 O 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 Quantity Demand MC Exter nality MC private MC Social A competitive tire manufacturing industry spews emissions into the air at47 per tire a marginal cost of 1.5-q, where q is the quantity of tires produced per month (in thousands). The industry marginal cost, excluding the cost of emissions (private marginal cost), is 4 + 4•q, expressed in $ per tire. The inverse demand curve for tires is p = 480 - 3-q, also expressed in $ per tire. In order to achieve the socially efficient level of tire production, which takes into account the optimal level of air pollution, the government levies a tax on the industry. What is the efficient pollution tax? $84 per tire $101 per tire $152 per tire Price
- EOC 11.04 Two businesses, X and Y, each dump 20 tonnes of pollution into a creek. In an effort to reduce pollution, the government will now require businesses to have a pollution permit to dump pollutants in the creek. Each business receives 10 pollution permits and they can use it to pollute or sell it to the other business (but lose the ability to pollute). To reduce pollution it costs business X $100 per tonne of pollutant eliminated and it costs business Y $50 per tonne of pollutant eliminated. Once the two businesses have traded these permits with each other, what is the likely outcome? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a business X emits 10 tonnes of pollutants and business Y emits 10 tonnes of pollutants. b business X no longer pollutes, and business Y will not lower the amount it pollutes. business X raises its pollution, and business Y will lower how much it pollutes. business Y no longer pollutes, and…18. Identify whether the following schenarios describe positive or negative externalites or neither. A. Positive Externalities B. Neither C. Negative Externalities 1. Pollutants into the river ruin the fishing for your town 2. The city renovates a run down neighborhood next to yours 3. The price of potatoes rises due to bad weather16. A pharmaceutical company develops a vaccine against malaria, a disease that kills large numbers of people worldwide. This vaccine market presents Opositive externalities Onegative externalities Opublic goods Osocial cost and as a result Othe private demand for vaccine is greater than the social demand Othe social demand for vaccines is greater than the private demand Othe market will result in an over production of vaccines Othe price of the vaccine will be too low to generate profitfor the firm
- 9. Give an example of positive externality. Explain.Explanation it correctly Q)Is nutella positive externalities or negative?stion 10 « < Questi 4 points Marginal Cost to Eliminate (Dollars) Firm First Unit Second Unit Third Unit Fourth Unit A 54 67 82 107 57 68 86 108 54 66 82 107 D 62 73 91 111 The table shows the marginal costs for each of four firms (A, B, C, and D) to eliminate units of pollution from their production processes. For example, for Firm A to eliminate one unit of pollution, it would cost $54, and for Firm A to eliminate a second unit of pollution it would cost an additional If the government wanted to reduce pollution from 16 units to exactly 8 units, which of the following fees per unit of pollution would achieve that goal? 70 O 85 O 87 O 80
