Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 10, Problem 6IAPA
To determine
To compute:
The cost to taxpayers if the government subsidizes college to the extent where efficient number of students enroll.
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Answer the attached question
A situation in which the Marginal Social Cost is greater than the Marginal Private Cost is
a. Positive Consumption Externality
○ b. Positive Production Externality
c. Negative Production Externality
○ d. Negative Consumption Externality
Clear my choice
Which of these is an ideal economic situation that leads to a positive externality?
a.
Social costs are higher than private costs
b.
Private costs are equal to social costs
c.
Private costs are higher than social costs
d.
Private costs are lower than social costs
Chapter 10 Solutions
Foundations of Economics (8th Edition)
Ch. 10 - Prob. 1SPPACh. 10 - Prob. 2SPPACh. 10 - Prob. 3SPPACh. 10 - Prob. 4SPPACh. 10 - Prob. 5SPPACh. 10 - Prob. 6SPPACh. 10 - Prob. 7SPPACh. 10 - Prob. 8SPPACh. 10 - Prob. 9SPPACh. 10 - Prob. 10SPPA
Ch. 10 - Prob. 1IAPACh. 10 - Prob. 2IAPACh. 10 - Prob. 3IAPACh. 10 - Use the following information to work Problems 3...Ch. 10 - Prob. 5IAPACh. 10 - Prob. 6IAPACh. 10 - Prob. 7IAPACh. 10 - Prob. 8IAPACh. 10 - Prob. 9IAPACh. 10 - Prob. 1MCQCh. 10 - Prob. 2MCQCh. 10 - Prob. 3MCQCh. 10 - Prob. 4MCQCh. 10 - Prob. 5MCQCh. 10 - Prob. 6MCQ
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- What is the concept of a negative externality in economics? A. A benefit received by individuals who did not incur the cost B. A cost incurred by individuals who did not receive the benefit C. A situation where external parties receive equal benefits and costs D. A situation where the government intervenes in the marketarrow_forward1. When a production externality has a beneficial effect on a bystander at the market equilibrium a. the market will be efficient b. the social cost of production is less than the private cost c. society is unlikely to benefit from production subsidies d. the private benefit from consumption is less than the social cost of production 2. In the short term, we would expect home construction to have a: a. High elasticity of demand b. Low elasticity of demand c. Low elasticity of supply d. High elasticity of supply 3. Which of the following would be associated with monetary policy operations in response to an economic downturn: a. A shift of the money demand curve to the right. b. A shift of the money supply curve to the right. c. A shift of the money demand curve to the left. d. A shift of the money supply curve to the left. 4. If the government cuts government spending, then over time the government budget deficit: a. will definitely rise b. will definitely fall c. may fall, or…arrow_forwardMankiw Chapter 11 question 2 Are the externalities associated with public goods generally positive or negative? Use examples in your answer. Is the free market quantitiy of public goods generally greater or less than efficient quantity?arrow_forward
- This graph represents the tobacco industry. IPrice 16 14 Social Cost 12 10 Private Cost 8 6 4 Demand 200 500 650 Quantity a) Without any government intervention, what is the market determined price and quantity? b) What is the price of the externality? c) What is the socially optimal price and quantity? d) What should the government do (impose a tax or provide a subsidy) to internalize this externality? What is the amount of the the corrective tax/subsidy needed to be to move the outcome from the market equilibrium to the socially-optimal outcome?arrow_forwardA negative externality exists if A. there are price controls in a market. B. the marginal private cost of producing a good or service exceeds the social cost. C. there are quantity controls in a market. D. the marginal social cost of producing a good or service exceeds the private cost.arrow_forwardOnly typed answer and please don't use chatgpt A way to equate marginal social cost and marginal private cost to eliminate externalities would be: Group of answer choices Instituting tax reform. None of the available answers. Instituting a tax on the good creating the externality. Increasing the cost of a substitute of the good creating. Reducing the cost of the good creating the externality.arrow_forward
- Paragraph Styles ILOS: A2, C2 Editing Voice 4. The paper industry has the demand and supply curves shown below: Price of paper Quantity demanded Quantity supplied 80 40 70 50 4 60 60 50 70 a. Suppose that this industry results in extreme externalities. What can be said about its optimal output? b. Draw the supply and demand curves for paper. Does the supply curve reflect the true social costs of producing the product? If not will a supply curve reflecting the true social costs lies above or below the supply curve you have drawn? c. What is the equilibrium price of paper? From the point of view of reflecting the true social costs, is this price the correct one, or too low or too high?arrow_forwardWhich of the following is a positive externality? A. bike pathsB. contaminated waterC. food produced in unsanitary processing plantsD. automobiles produced without seat beltsarrow_forwardGovernment raises it's expenditure on producing public goods. Which economic value does it reflect? Explain?arrow_forward
- An externality is Select one: a. the uncompensated impact of one person's actions on the well-being of a bystander. b. a market equilibrium tax. c. the costs that parties incur in the process of agreeing and following through on a bargain. d. the proposition that private parties can bargain without cost over the allocation of resources.arrow_forwardWhat are Externalities? What some strategies the Government may use to address both positive and negative externalitiesarrow_forwardWhat is cost–benefit analysis of public goods?Why is it important? Why is it hard?arrow_forward
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