EBK PRINCIPLES OF ECONOMICS
8th Edition
ISBN: 8220103600453
Author: Mankiw
Publisher: CENGAGE L
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Question
Chapter 10, Problem 6PA
Sub part (a):
To determine
Externality.
Sub part (b):
To determine
Externality.
Sub part (c):
To determine
Externality.
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Which of the following generate the type of externality previously described? Check all that apply. The city where you live has granted a permit to put a movie theater in your neighborhood, causing traffic jams at night and on weekends. A microbiology lab has published its breakthrough in swine flu research. Your roommate, Lucia, has bought a puppy that barks all day while you are trying to study economics. Eric has planted several trees in his backyard that increase the beauty of the neighborhood, especially during the fall foliage season.
Give an example for a negative or positive externality and explain the inefficiency this negative or positive externality might cause. How should the government deal with this negative or positive externality? (regulation, taxes, subsidies, private remedies, etc.) What would be the most appropriate remedy for your example?
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Chapter 10 Solutions
EBK PRINCIPLES OF ECONOMICS
Ch. 10.1 - Prob. 1QQCh. 10.2 - Prob. 2QQCh. 10.3 - Prob. 3QQCh. 10 - Prob. 1CQQCh. 10 - Prob. 2CQQCh. 10 - Prob. 3CQQCh. 10 - Prob. 4CQQCh. 10 - Prob. 5CQQCh. 10 - Prob. 6CQQCh. 10 - Prob. 1QR
Ch. 10 - Prob. 2QRCh. 10 - Prob. 3QRCh. 10 - Prob. 4QRCh. 10 - Prob. 5QRCh. 10 - Prob. 6QRCh. 10 - Prob. 1PACh. 10 - Prob. 2PACh. 10 - Greater consumption of alcohol leads to more motor...Ch. 10 - Prob. 4PACh. 10 - The many identical residents of Whoville love...Ch. 10 - Prob. 6PACh. 10 - Prob. 7PACh. 10 - Prob. 8PACh. 10 - Prob. 9PA
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- How do negative externalities cause market failure?arrow_forwardsuggest a potential solution to that student's problem. How would you internalize their externality or dissuade the free riding? A time I have experienced negative externality would be air pollution. The wild-fires in Canada have caused a tremendous amount of air pollution (smoke), while these fires are 'controlled' they have gotten out of hand and aren't benefiting the public. The smoke has created an unhealthy air level and can in some cases cause death, going outside I can clearly see the smoke that has traveled and I can smell it. Some of my friends have to stay inside because of health conditions, although it was meant to prevent a larger fire it has created a larger problem as it has gotten out control. This is problematic because there's almost no way of clearing up the smoke and people who will suffer from its outcome will not receive any compensation. It will also effect wild-life and plants, it will be hard to reverse the effects of this fire and the harm it has done. With…arrow_forwardWhat would happen if the government subsidized consumption of this product because it has positive externalities in consumption?arrow_forward
- What are externalities; and how the government can fix itarrow_forwardWhat externality problem do you expect in the market for plastic bags? How does the government correct the inefficiency of the market? Explain in detail with diagramarrow_forwardDefine externality and please make sure to include three (3) key characteristics of the effects of an externality in your answer.arrow_forward
- I chose option D and got this wrong. I thought that when you had a positive externality The demand curve move to the right. Wouldn’t this mean that the level of output and the price would be greater than the free market ones? can you explain how my answer is wrong? What is correct?arrow_forwardwhy do externalities make market outcomes inefficient?arrow_forwardWhy the presence of the product variety externality does imply that there is too little entry of new firms in the market?arrow_forward
- The Pigouvian solution to externalities directly compensates those who have had harm done to them. Choose T or F: a. True b. Falsearrow_forwardCause and Individual Example of Market Failure with a Negative Externality In Section 1, externalities are introduced as well as market failures, where the socially optimal output is not the same as what the market produces by itself. For this discussion, your task is to: Describe a real-world negative externality. In your externality identify who are the participants in the market and who receives the spillover How are the incentives for the firm misaligned from the rest of society to make the externality?arrow_forwardGive an example of a positive and negative externality. Explain why market outcomes are inefficient in the presence of these externalities.arrow_forward
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