Use the graph below to answer the following questions. 50 40 30 20 10 200 400 Social Cost Private Cost Private Cost-Social Cost Q 800 Is this a positive or negative externality? [Select] What will be the equilibrium price and quantity in this market? Select] What is the socially optimal (efficient) price and quantity for this market? [Select]

Use the graph below to answer the following questions. 50 40 30 20 10 200 400 Social Cost Private Cost Private Cost-Social Cost Q 800 Is this a positive or negative externality? [Select] What will be the equilibrium price and quantity in this market? Select] What is the socially optimal (efficient) price and quantity for this market? [Select]

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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i am having trouble with this question microeconmics chapter 5 question 5
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? 500 (already answer) If there is an external benefit of $3, what is the efficient quantity? 700 (already answer) 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? 3 (already answer) 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…
The Cemex plant in Davenport produced cement. The production of cement created dust which traveled through the air and landed on the nearby area. Testing at an elementary school and fire department near the plant showed toxic levels of Chromium 6 resulting from the dust. Using the concept of externalities and the graph below, explain what kind of externality this event created and the effects this had on economic efficiency. Be sure to indicate any differences between market price and quantity for cement and the efficient price and quantity.
explain using the diagram why a negative externality leads to a market failur. how can the Government fix the problem created by a negative externality?
The table below shows cost data for producing different amounts of oil. The market for oil produces negative externalities in the form of pollution and environmental damage. ITTT Price Demand Private Supply Private+Social Supply 4 55 40 10 12 50 50 20 20 45 60 30 28 40 70 40 36 35 80 50 How many barrels of oil will be produced by the free market? What is the socially optimal output of oil?
Price, Cost P4 Ps P₂ P₁ Q₂ Q₁ Quantity Refer to figure above. If a negative externality exists, then the external costs associated with the negative externality equal the distance between points and the socially optimal output is D and B; Q1 B and D; Q2 A and B; Q2 Cand B; Q2
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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Question Completion Status: The market below has an externality. Which area represents the total cost or benefit of the externality if Qo units are produced and consumed? A H D. MSB Q (If you can't see the graph or want to see a larger version then click here.) O C+E Он O F+G O A+B+D
Can you answer this?
Price $40 Marginal Social Cost $36 $32 Supply/ Marginal Private Cost $28 $24 $20 $16 $12 $8 $4 Demand 10 20 30 40 50 60 70 80 90 Quantity 1) Does the above diagram depict a positive externality or a negative externality? 2) What is the market quantity and price? 3) What is the socially optimal quantity? 4) What is the socially optimal price? 5) At the socially optimal price and quantity, what is the consumer surplus? 6) At the socially optimal price and quantity, what is the producer surplus? Remember, producers care about their private costs.| Next, suppose that the government steps in to mandate the socially optimal quantity, but does not allow the price to rise. 7) What is the consumer surplus? 8) What is the producer surplus?
Refer to the table below, which describes the market for cigarettes in terms of marginal benefits, private marginal costs, and private+social marginal costs. Marginal benefits Private marginal costs Private + social marginal costs $8 $12 $4 $10 $6 $10 $12 $8 $8 $6 $10 $14 $4 $12 $16 Calculate the equilibrium quantity of cigarettes that would be produced and sold if society incorporated the negative externalities of cigarettes by taxing cigarettes. Type your answer... Quantity 100 200 300 400 500 Previous DE O 2º W 3 E a Q $ 4 R % 5 ♫ JMA T A 6 MacBook Pro Y & 7 W D U 8 P 1+ I S ( 9 cricut O 0 P 13 { ( Next O