The private Marginal benefits for cassava is given by 30-3X where X is the number of cassava consumed. Private marginal cost of producing cassava is the same as 15 shillings. for each cassava produced, external cost of ksh. 6 is imposed on members of Nairobi village.Without government interventon, how much of cassava is produced?What is efficient level of cassava productionwhat is the gain to society involved moving from inefficient to effeicient level of production and if pigouvian ta is introduced, how much tax revenue will be raised?

Externalities refer to the costs or benefits of an economic transaction, incurred by a third party…

Answered: The private Marginal benefits for…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The private Marginal benefits for cassava is given by 30-3X where X is the number of cassava consumed. Private marginal cost of producing cassava is the same as 15 shillings. for each cassava produced, external cost of ksh. 6 is imposed on members of Nairobi village.

Without government interventon, how much of cassava is produced?
What is efficient level of cassava production
what is the gain to society involved moving from inefficient to effeicient level of production and if pigouvian ta is introduced, how much tax revenue will be raised?

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