Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 13, Problem 3SCQ
The Gizmo Company is planning to develop new household gadgets. Table 13.4 shows the company’s demand for financial capital for research and development of these gadgets, based on expected
- If the going interest rate is
- Assume that the interest rate is still
How much will the firm invest if it also receives the social benefits of its investment? (Add an additional
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4. Consider a community with 80 vacant parcels. The value of developed parcels can be
represented by V=80-X, where V is measured in 1000s of $. X represents the number of
developed parcels. Each parcel costs 10,000 (C=10) to prepare for development.
The social value of undeveloped parcels can be represented by the function U=10+X, where U
is also measured in 1000s of $.
What is the efficient number of developed parcels?
How many parcels will be developed if each parcel is owned by a separate individual,
maximizing their own profits?
2. Suppose MAC = 40 - 2E and MD = 2E. Draw a graph to show and calculate the
following:
a) What are the efficient level of emissions e*, total damages TD, total abatement cost
TAC, and total social costs related to emissions?
b) If there is no pollution control, what is the total social costs related to emissions. How
much of costs can be saved by moving to e*?
c) What are the total social costs related to zero emissions? How much of costs can be
saved by moving to e*?
d) If the actual emission level is 15, what are the total damages, total abatement cost, and
total social costs related to emissions? Compared with the efficient level, what is the
deadweight loss (in terms of too high total social cost)?
QUESTION 16
16. Entering patient health care data into a database accessible to health care professionals across the medical profession and a wide region increases the ability to apply
artificial intelligence to diagnostics and treatment of diseases. This is an example of
a) Negative consumption externality.
b) Positive consumption externality.
c) Negative production externality.
d) Positive production externality.
QUESTION 17
17. Which of the following is an example of a negative consumption externality?
a) water pollution impact of a paper plant
b) honey production and pollination of fruit trees
c) second-hand smoke
d) vaccination against a communicable disease
e) none of the above
Chapter 13 Solutions
Principles of Economics 2e
Ch. 13 - Do market demand curves reflect positive...Ch. 13 - Suppose that Sonys R. Is this a private or social...Ch. 13 - The Gizmo Company is planning to develop new...Ch. 13 - The Junkbuyers Company travels from home to home,...Ch. 13 - When residents in a neighborhood tidy it and keep...Ch. 13 - Education provides both private benefits to those...Ch. 13 - Which of the following goods or services are...Ch. 13 - Are the following goods non-rival in consumption?...Ch. 13 - In what ways (it) company investments in research...Ch. 13 - Will the demand for borrowing and investing in R&D...
Ch. 13 - Why might private markets tend to provide too few...Ch. 13 - What can government do to encourage the...Ch. 13 - What are the two key characteristics of public...Ch. 13 - Name two public goods and explain why they are...Ch. 13 - What is the free rider problem?Ch. 13 - Explain why the federal government funds national...Ch. 13 - Call a company be guaranteed all of the Social...Ch. 13 - Is it inevitable that government must become...Ch. 13 - How do public television stations, like PBS, try...Ch. 13 - Why is a football game on ESPN a quasi-public good...Ch. 13 - Provide two examples of goods/services that are...Ch. 13 - Radio stations, tornado sirens, light houses, and...Ch. 13 - HighFlyer Airlines wants to build new airplanes...Ch. 13 - Assume that the marginal private costs of a film...Ch. 13 - Becky and Sarah are sisters 1who share a room....
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