The next 3 questions involve the following Figure, which depicts a negative externality: Figure 3: PPF MSC 17 MPC 13 Demand 6 10 Quantity 25. What is the market equilibrium price and quantity? (A) p° = 9, q* = 10 (B) p° = 9, q* = 6 (C) p' = 17, q* = 10 (D) p* = 13, q* = 6 26. What is the deadweight loss from the externality? (A) $32 (B) $16 (C) 88 (D) $64 27. What is the socially efficient price and quantity? (A) p* = 9, q* = 10 (B) p° = 9, q* = 6 (C) p' = 17, q* = 10 (D) p° = 13, q* = 6

The next 3 questions involve the following Figure, which depicts a negative externality: Figure 3: PPF MSC 17 MPC 13 Demand 6 10 Quantity 25. What is the market equilibrium price and quantity? (A) p° = 9, q* = 10 (B) p° = 9, q* = 6 (C) p' = 17, q* = 10 (D) p* = 13, q* = 6 26. What is the deadweight loss from the externality? (A) $32 (B) $16 (C) 88 (D) $64 27. What is the socially efficient price and quantity? (A) p* = 9, q* = 10 (B) p° = 9, q* = 6 (C) p' = 17, q* = 10 (D) p° = 13, q* = 6

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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