rket failure and the role of government: Unit testThis graph shows the market for vaccines, including themarginal social benefit (MSB), marginal social cost (MSC),and marginal private benefit (MPB).APriceBPeEPaPePbPaI11ILIChoose 1 answer:IIIIIa quota of Q1.11Va per unit tax of PLIIIQ₁ Q2The government can attempt to correct thisexternality by settinga per-unit subsidy of Pd - P.a subsidy of Pc - Pb.3Pea per unit tax of Pb - Pd.X11MSCMSBMPBQ3 Quantity

Market is in equilibrium where private marginal benefit is equal to private marginal cost. It…

This graph shows the market for vaccines, including the marginal social benefit (MSB), marginal social cost (MSC), and marginal private benefit (MPB). Price Pe B Pa Pe Pb Pa Choose 1 answer: 11 II W x The government can attempt to correct this externality by setting MSC MSB MPB Q₁ Q2 Q3 Quantity a quota of Q1. a per-unit subsidy of Pd - Pb. a per unit tax of P - Pe a per unit tax of Pb - Pd. a subsidy of Pc - Pb.

This graph shows the market for vaccines, including the marginal social benefit (MSB), marginal social cost (MSC), and marginal private benefit (MPB). Price Pe B Pa Pe Pb Pa Choose 1 answer: 11 II W x The government can attempt to correct this externality by setting MSC MSB MPB Q₁ Q2 Q3 Quantity a quota of Q1. a per-unit subsidy of Pd - Pb. a per unit tax of P - Pe a per unit tax of Pb - Pd. a subsidy of Pc - Pb.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

in the town of Externalia, vaccination programs create additional benefits to the community, beyond the consumers who actually purchase vaccinations The graph on the right shows the market for vaccinations 11 Using the line drawing tool, show a ine representing the true demand for vaccinations, if the external benefit were taken into account Label your line D 2) Using the point drawing tool show the new equibrium price and quantity Label your point E Carefully follow the instructions above, and only draw the required objects Price (5) Qo Quantity of vaccinations (housands)
A negative externality means the quantity in the market is _____ the allocatively efficient quanitity and can be corrected by a _____. A positive externality means the quantity in the market is _____ the allocatively efficient quantity and can be corrected by a ______. Word Bank: Larger than, tax, smaller than, subsidy, smaller than, equal to, subsidy, larger than, equal to, tax.
Let Q be the quantity of natural gas in tons from fracking. Assume fracking imposes a negative externality of $24 per ton. The private demand for natural gas from fracking is P = 200 - 4Q while the private supply curve is P = 20 + 2Q. If the government imposes a $24 tax per ton of natural gas from fracking, what is the change in the total surplus from before to after the imposition of the tax? O -$672. O $48. O $672. -$48.
The following figure shows the market for steel. For the market with pollution in the following Figure, what constant, specific tax on output could the government set to maximize welfare? * MCS $150- MC $125- $100- $75- $50- $25- Q 50 100 150 200 250300
The graph depicts the market for a good that creates a negative externality. Move the triangle labeled "DWL" to illustrate the deadweight loss associated with the market equilibrium quantity. Supply (social) DWL Supply (internal) Demand Quantity Price
Figure 1. The graph depicts the market for plastic containers. Price 16- 14- 12- 10 8- 6 200 500 650 Social Cost Private Cost Demand Quantity Refer to Figure 1. In order to reach the social optimum, the government could O offer a subsidy of $8 per unit on the production of plastic containers. O impose a tax of $8 per unit on the production of plastic containers. O offer a subsidy of $4 per unit on the production of plastic containers. O impose a tax of $4 per unit on the production of plastic containers.
Polio is a disease caused by a contagious virus that can result in paralysis. A vaccine prevents the disease and also its contagion. The government decides to subsidize the application of this vaccine by offering it for free. a. Explain how this subsidy will impact the amount of vaccines applied compared to the free market outcome with no subsidy, i.e. where people would need to pay for their own vaccine. b. Why is this subsidy different from a subsidy the government may grant on a good that generates no externalities like food? (hint: deadweight loss is not the same).
12
The production of fabric generates toxic effluents related to the dyes used. This is typically disposed of with wastewater, which generates pollution. If the government does not intervene, the market for fabric has an equilibrium price of $250 per roll and an equilibrium quantity of 10,000 rolls. a.How would the socially optimal quantity of fabric compare to the free market equilibrium quantity of 10,000 rolls? Why? b. Using a supply and demand graph show the effect on social welfare of allowing the market for fabric to operate without government intervention. Label all the curves and relevant points on your graph. c. Would a government subsidy or tax help the market achieve the social optimum? Explain. Show the necessary subsidy/tax on your graph. d. Explain how this intervention helps achieve the social optimum and what information would be necessary to implement it.