Explain when MSC = MPC and MSB = MPB .

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Answer 1

Question

Chapter 17, Problem 1QP

To determine

Explain when MSC=MPC and MSB=MPB.

Expert Solution & Answer

Explanation of Solution

When the marginal external cost (MEC) is zero, the marginal social cost (MSC) is equal to the marginal private cost (MPC). On the other hand, when the marginal external benefit (MEB) is zero, the marginal social benefit (MSB) is equal to the marginal private benefit (MPB)

Economics Concept Introduction

Marginal social benefit (MSB): Marginal social benefit (MSB) is a high utility or satisfaction felt by an individual when they purchase an additional unit of a good or service.

Marginal social cost (MSC): Marginal social cost is the added cost spent for producing an extra output of a unit.

Marginal external benefit (MEB): The marginal external benefit refers to the amount of additional benefits obtained in the process of increasing one more unit of output to third party.

Marginal external cost (MEC): The marginal external cost refers to the amount of additional cost obtained in the process of increasing one more unit of output to third party.

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16:10 ← BEC 3701 - Assignments-... KWAME NKRUMAH UNIVERSITY TEACHING FOR EXCELLENCE SCHOOL OF BUSINESS STUDIES DEPARTMENT OF ECONOMICS AND FINANCE ADVANCED MICRO-ECONOMICS (BEC 3701) Assignments INSTRUCTIONS: Check instructions below: LTE 1) Let u(q1,q2) = ln q₁ + q2 be the (direct) utility function, where q₁ and q2the two goods. Denote P₁ and P2 as the prices of those two goods and let M be per period money income. Derive each of the following: a) the ordinary or Marshallian demand functions q₁ = d₂ (P₁, P₂, M) for i = 1,2 [3 Marks] b) the compensated or Hicksian demand functions q₁ = h₂ (P₁, P2, M) for i = 1,2 [3 Marks] c) the Indirect Utility Function uº = v(P₁, P2, M) [3 Marks] d) the Expenditure Function E(P1, P2, U°) [3 Marks] e) Draw a diagram of the solution. There should be two graphs, one above the other; the first containing the indifference curves and budget constraint that characterize the solution to the consumer's choice problem; the second characterizing the demand…

Answer 2

Question

Chapter 17, Problem 1QP

To determine

Explain when MSC=MPC and MSB=MPB.

Expert Solution & Answer

Explanation of Solution

When the marginal external cost (MEC) is zero, the marginal social cost (MSC) is equal to the marginal private cost (MPC). On the other hand, when the marginal external benefit (MEB) is zero, the marginal social benefit (MSB) is equal to the marginal private benefit (MPB)

Economics Concept Introduction

Marginal social benefit (MSB): Marginal social benefit (MSB) is a high utility or satisfaction felt by an individual when they purchase an additional unit of a good or service.

Marginal social cost (MSC): Marginal social cost is the added cost spent for producing an extra output of a unit.

Marginal external benefit (MEB): The marginal external benefit refers to the amount of additional benefits obtained in the process of increasing one more unit of output to third party.

Marginal external cost (MEC): The marginal external cost refers to the amount of additional cost obtained in the process of increasing one more unit of output to third party.

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Answer 3

Question

Chapter 17, Problem 1QP

To determine

Explain when MSC=MPC and MSB=MPB.

Expert Solution & Answer

Explanation of Solution

When the marginal external cost (MEC) is zero, the marginal social cost (MSC) is equal to the marginal private cost (MPC). On the other hand, when the marginal external benefit (MEB) is zero, the marginal social benefit (MSB) is equal to the marginal private benefit (MPB)

Economics Concept Introduction

Marginal social benefit (MSB): Marginal social benefit (MSB) is a high utility or satisfaction felt by an individual when they purchase an additional unit of a good or service.

Marginal social cost (MSC): Marginal social cost is the added cost spent for producing an extra output of a unit.

Marginal external benefit (MEB): The marginal external benefit refers to the amount of additional benefits obtained in the process of increasing one more unit of output to third party.

Marginal external cost (MEC): The marginal external cost refers to the amount of additional cost obtained in the process of increasing one more unit of output to third party.

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Answer 4

Question

Chapter 17, Problem 1QP

To determine

Explain when MSC=MPC and MSB=MPB.

Expert Solution & Answer

Explanation of Solution

When the marginal external cost (MEC) is zero, the marginal social cost (MSC) is equal to the marginal private cost (MPC). On the other hand, when the marginal external benefit (MEB) is zero, the marginal social benefit (MSB) is equal to the marginal private benefit (MPB)

Economics Concept Introduction

Marginal social benefit (MSB): Marginal social benefit (MSB) is a high utility or satisfaction felt by an individual when they purchase an additional unit of a good or service.

Marginal social cost (MSC): Marginal social cost is the added cost spent for producing an extra output of a unit.

Marginal external benefit (MEB): The marginal external benefit refers to the amount of additional benefits obtained in the process of increasing one more unit of output to third party.

Marginal external cost (MEC): The marginal external cost refers to the amount of additional cost obtained in the process of increasing one more unit of output to third party.

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Answer 5

Chapter 17, Problem 1QP

To determine

Explain when MSC=MPC and MSB=MPB.

Expert Solution & Answer

Explanation of Solution

When the marginal external cost (MEC) is zero, the marginal social cost (MSC) is equal to the marginal private cost (MPC). On the other hand, when the marginal external benefit (MEB) is zero, the marginal social benefit (MSB) is equal to the marginal private benefit (MPB)

Economics Concept Introduction

Marginal social benefit (MSB): Marginal social benefit (MSB) is a high utility or satisfaction felt by an individual when they purchase an additional unit of a good or service.

Marginal social cost (MSC): Marginal social cost is the added cost spent for producing an extra output of a unit.

Marginal external benefit (MEB): The marginal external benefit refers to the amount of additional benefits obtained in the process of increasing one more unit of output to third party.

Marginal external cost (MEC): The marginal external cost refers to the amount of additional cost obtained in the process of increasing one more unit of output to third party.

Answer 6

Chapter 17, Problem 1QP

To determine

Explain when MSC=MPC and MSB=MPB.

Expert Solution & Answer

Explanation of Solution

When the marginal external cost (MEC) is zero, the marginal social cost (MSC) is equal to the marginal private cost (MPC). On the other hand, when the marginal external benefit (MEB) is zero, the marginal social benefit (MSB) is equal to the marginal private benefit (MPB)

Economics Concept Introduction

Marginal social benefit (MSB): Marginal social benefit (MSB) is a high utility or satisfaction felt by an individual when they purchase an additional unit of a good or service.

Marginal social cost (MSC): Marginal social cost is the added cost spent for producing an extra output of a unit.

Marginal external benefit (MEB): The marginal external benefit refers to the amount of additional benefits obtained in the process of increasing one more unit of output to third party.

Marginal external cost (MEC): The marginal external cost refers to the amount of additional cost obtained in the process of increasing one more unit of output to third party.

Answer 7

Chapter 17, Problem 1QP

To determine

Explain when MSC=MPC and MSB=MPB.

Answer 8

Expert Solution & Answer

Explanation of Solution

When the marginal external cost (MEC) is zero, the marginal social cost (MSC) is equal to the marginal private cost (MPC). On the other hand, when the marginal external benefit (MEB) is zero, the marginal social benefit (MSB) is equal to the marginal private benefit (MPB)

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Marginal social benefit (MSB): Marginal social benefit (MSB) is a high utility or satisfaction felt by an individual when they purchase an additional unit of a good or service.

Marginal social cost (MSC): Marginal social cost is the added cost spent for producing an extra output of a unit.

Marginal external benefit (MEB): The marginal external benefit refers to the amount of additional benefits obtained in the process of increasing one more unit of output to third party.

Marginal external cost (MEC): The marginal external cost refers to the amount of additional cost obtained in the process of increasing one more unit of output to third party.

Answer 12

Ch. 17.1 - Prob. 1ST Ch. 17.1 - Prob. 2ST Ch. 17.2 - Prob. 1ST Ch. 17.2 - Prob. 2ST Ch. 17.2 - Prob. 3ST Ch. 17.2 - Prob. 4ST Ch. 17.3 - Prob. 1ST Ch. 17.3 - Prob. 2ST Ch. 17.3 - Prob. 3ST Ch. 17.4 - Prob. 1ST

Explain when MSC = MPC and MSB = MPB .

Explain when MSC=MPC and MSB=MPB.

Explanation of Solution

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