Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 11, Problem 4IAPA
To determine
Whether the use of Appalachian Trail is more efficient if hikers are required to pay a fee for its use.
To ascertain whether it would be efficient if the more popular spot such as Annapolis Rock had higher priced access.
To provide reason for the lack of market solutions for the problem of Tragedy of Commons.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
What actions does economic theory suggest to help alleviate the tragedy of the commons? What are some methods for managing possible solutions?
Who is responsible for our current Tragedy of the Commons?
How does the law address either the "Tragedy of the Commons", the free-rider problem, or pollution as an externality?
Chapter 11 Solutions
Foundations of Economics (8th Edition)
Ch. 11 - Prob. 1SPPACh. 11 - Prob. 2SPPACh. 11 - Prob. 3SPPACh. 11 - Prob. 4SPPACh. 11 - Prob. 5SPPACh. 11 - Prob. 6SPPACh. 11 - Prob. 7SPPACh. 11 - Prob. 8SPPACh. 11 - Prob. 9SPPACh. 11 - Prob. 10SPPA
Ch. 11 - Prob. 1IAPACh. 11 - Prob. 2IAPACh. 11 - Prob. 3IAPACh. 11 - Prob. 4IAPACh. 11 - Prob. 5IAPACh. 11 - Prob. 6IAPACh. 11 - Prob. 7IAPACh. 11 - Prob. 8IAPACh. 11 - Prob. 9IAPACh. 11 - Prob. 1MCQCh. 11 - Prob. 2MCQCh. 11 - Prob. 3MCQCh. 11 - Prob. 4MCQCh. 11 - A renewable common resource is used sustainably if...Ch. 11 - Prob. 6MCQCh. 11 - Prob. 7MCQCh. 11 - When ITQs are assigned, the market price of an ITQ...
Knowledge Booster
Similar questions
- What is an externality? How do they affect market efficiency? If an externality is present, where is the socially optimal point of production? Where will the market produce if there is no government intervention? How do we get from the private market equilibrium to the socially optimal one?arrow_forwardOffer an example of a good that has become a public (or quasi-public) good due to technology. Explain how technology has made this good non-rival in consumption or non-excludable. Is there a free rider problem with the good you mentioned? How can the free rider problem be addressed in this example?arrow_forwardThe marginal cost of educating a college student online is $3,000 a year. The table shows the marginal private benefit schedule of a college education. The marginal external benefit is 50 percent of the marginal private benefit. If the government offers vouchers to online students so that the efficient number of students will enroll, what is the value of the voucher and how many students will enroll? The number of students enrolled is million students and the value of the voucher is $ per student. Students (millions per year) 1 23 4 556 Marginal private benefit (dollars per student per year 6,000 5,000 4,000 3,000 2,000 1,000arrow_forward
- Possible methods for avoiding the externalities in a free-market economy?arrow_forwardThe farmer takes the rancher to court and the judge decides putting up a fence is the farmer’s responsibility. What is the nature of the externality in this problem?arrow_forwardAir horns impose many external costs on society: the risk of being deafened, the annoyance of being awakened in the middle of the night, and so on. Therefore, the market equilibrium quantity of air horns is not equal to the socially optimal quantity. The following graph shows the demand for air horns (their private value), the supply of air horns (the private cost of producing them), and the social cost of air horns, including both the private cost and external costs. Use the black point (plus symbol) to indicate the market equilibrium quantity. Next, use the purple point (diamond symbol) to indicate the socially optimal quantity.arrow_forward
- The graph shows the demand for design school education. The marginal cost of this education is a constant $4,000 per student per year and the marginal external benefit is a constant $3,000 per student per year If the government provides public design schools, what tuition will achieve the efficient number of students? How much will taxpayers have to pay? Draw the marginal social cost curve. Label it MSC. Draw the marginal social benefit curve. Label it MSB. Draw a line that shows the tuition that schools charge to achieve the efficient number of students. Label it Tuition. The tuition that colleges charge is $,000 per student. The amount paid by taxpayers is $ 000 per student. 14- 124 10- 84 64 4- 2-4 Price and cost (thousands of dollars) 20 MSB I D=MB 40 60 80 100 120 140 Students (thousands per year) Q Q ✔ (0,0) >>> Draw only the objects specified in the question.arrow_forwardThe graph illustrates the market for pesticide with no government intervention. When the factories produce pesticide, they also create waste, which they dump into a lake on the outskirts of town. The marginal external cost of the dumped waste is equal to the marginal private cost of producing pesticide (that is, the marginal social cost of producing the pesticide is double the marginal private cost.) What quantity of pesticide is produced if no one owns the lake? If no one owns the lake, the quantity of pesticide produced is tonnes a week. The efficient quantity of pesticide is tonnes a week. 480- 400- 320- 240- 160- 80- Price (dollars per tonne) 40 80 120 160 Quantity (tonnes of pesticide per week) S D 200 Narrow_forwardConfused and unsure how to solve properlyarrow_forward
- Externalities Do you think that there would be external effects assocociated with water from a uranium mine leaking into Kakadu National Park? If so, what would be the nature of the external effects? Can you think of policies that might deal with each external effect (that is, improve social wellbeing)?arrow_forwardIn the market for petroleum products the inverse private supply and demand are represented by: Supply: P = 10.0 + 0.075Q Demand: P = 42.0 – 0.125Q The production of petroleum causes pollution which has the following cost: E = 0.05Q What is the market outcome in terms of Price and Quantity? Calculate and then illustrate on a large graph (you’ll use the graph throughout the question). What is the socially efficient outcome in terms of Price and Quantity? Calculate and then illustrate on the same graph you used for part a. What is the deadweight loss to society when it is at the market outcome? Calculate and then illustrate on the same graph you used for part a. What tax should be put on this market in order to move it to the efficient solution? Be sure to clearly indicate the monetary value of the tax and what it is put on. After the tax is placed, what price does the consumer in this market see? What price does the supplier see? How much revenue does the government…arrow_forwardImagine the government of California has proposed a new tax on vehicles based on the amount of emissions they produce in a year. In 2019, there will be 20 tons of emissions produced. The governor’s office has run the calculations and found that the socially optimal level is 14 tons and the marginal damage from each unit of pollution is $150. Imagine there are two types of drivers in California: commuters and non-commuters. Imagine that the marginal cost of reducing pollution for commuters is MCA_C=150Q and the marginal cost of reducing pollution for non-commuters is MCA_N=30Q. Each type initially created ten tons of pollution each. Their total cost of reductions is equal to TCA_C=75Q^2 and TCA_N=15Q^2. How much would each type choose to reduce under the tax? Imagine the governor instead suggested forcing all drivers to reduce their emissions by 30% from their 2019 levels. How would the costs of reduction here compare to the taxation case (please provide actual numbers)? Do you…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning