(a) Plot the PPF graph with no curved lines Concept Introduction: Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

Question

3. Consider the market for paper. The process of producing paper creates pollution. Assume that the marginal damage function for pollution is given by: MDF = 3E where damages are measured in dollars and E is the level of emissions. Assume further that the function describing the marginal abatement cost of emissions is given by MAC 120-E where benefits are measured in dollars and E is the level of emissions. a. Graph the marginal damage function (MDF) and the marginal abatement cost function (MAC). b. What is the unregulated level of emissions Eu? What is the social welfare of this emissions level? c. Assume an existing emission quota limits emissions to E = 60. Show on the graph why this policy is inefficient. What is the deadweight loss caused by this policy?

Answer 1

Question

Chapter 2, Problem 5P

To determine

(a)

Plot the PPF graph with no curved lines

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(b)

The cost of producing an additional car when 50 cars are being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(c)

The cost of producing an additional car when 150 cars are being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(d)

The cost of producing an additional washing machine when 50 cars are being produced and in case 150 are cars being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(e)

What is derived about the concept of opportunity cost from the above answers.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

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3. Consider the market for paper. The process of producing paper creates pollution. Assume that the marginal damage function for pollution is given by: MDF = 3E where damages are measured in dollars and E is the level of emissions. Assume further that the function describing the marginal abatement cost of emissions is given by MAC 120-E where benefits are measured in dollars and E is the level of emissions. a. Graph the marginal damage function (MDF) and the marginal abatement cost function (MAC). b. What is the unregulated level of emissions Eu? What is the social welfare of this emissions level? c. Assume an existing emission quota limits emissions to E = 60. Show on the graph why this policy is inefficient. What is the deadweight loss caused by this policy?

show written calculation for B

Problem 1: 1. If a stock is expected to pay an annual dividend of $20 forever, what is the approximate present value of the stock, given that the discount rate is 5%? 2. If a stock is expected to pay an annual dividend of $20 forever, what is the approximate present value of the stock, given that the discount rate is 8%? 3. If a stock is expected to pay an annual dividend of $20 this year, what is the approximate present value of the stock, given that the discount rate is 8% and dividends are expected to grow at a rate of 2% per year?

Answer 2

Question

Chapter 2, Problem 5P

To determine

(a)

Plot the PPF graph with no curved lines

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(b)

The cost of producing an additional car when 50 cars are being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(c)

The cost of producing an additional car when 150 cars are being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(d)

The cost of producing an additional washing machine when 50 cars are being produced and in case 150 are cars being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(e)

What is derived about the concept of opportunity cost from the above answers.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

Expert Solution & Answer

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Answer 3

Question

Chapter 2, Problem 5P

To determine

(a)

Plot the PPF graph with no curved lines

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(b)

The cost of producing an additional car when 50 cars are being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(c)

The cost of producing an additional car when 150 cars are being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(d)

The cost of producing an additional washing machine when 50 cars are being produced and in case 150 are cars being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(e)

What is derived about the concept of opportunity cost from the above answers.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

Expert Solution & Answer

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Answer 4

Question

Chapter 2, Problem 5P

To determine

(a)

Plot the PPF graph with no curved lines

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(b)

The cost of producing an additional car when 50 cars are being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(c)

The cost of producing an additional car when 150 cars are being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(d)

The cost of producing an additional washing machine when 50 cars are being produced and in case 150 are cars being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(e)

What is derived about the concept of opportunity cost from the above answers.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

Expert Solution & Answer

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Answer 5

Chapter 2, Problem 5P

To determine

(a)

Plot the PPF graph with no curved lines

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(b)

The cost of producing an additional car when 50 cars are being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(c)

The cost of producing an additional car when 150 cars are being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(d)

The cost of producing an additional washing machine when 50 cars are being produced and in case 150 are cars being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

To determine

(e)

What is derived about the concept of opportunity cost from the above answers.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

Answer 6

Chapter 2, Problem 5P

To determine

(a)

Plot the PPF graph with no curved lines

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

Answer 7

Chapter 2, Problem 5P

To determine

(a)

Plot the PPF graph with no curved lines

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

Answer 8

To determine

(b)

The cost of producing an additional car when 50 cars are being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

Answer 9

To determine

(b)

The cost of producing an additional car when 50 cars are being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

Answer 10

To determine

(c)

The cost of producing an additional car when 150 cars are being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

Answer 11

To determine

(c)

The cost of producing an additional car when 150 cars are being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

Answer 12

To determine

(d)

The cost of producing an additional washing machine when 50 cars are being produced and in case 150 are cars being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

Answer 13

To determine

(d)

The cost of producing an additional washing machine when 50 cars are being produced and in case 150 are cars being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

Answer 14

To determine

(e)

What is derived about the concept of opportunity cost from the above answers.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

Answer 15

To determine

(e)

What is derived about the concept of opportunity cost from the above answers.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

Answer 16

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Ch. 2 - Prob. 1P Ch. 2 - Prob. 2P Ch. 2 - Prob. 3P Ch. 2 - Prob. 4P Ch. 2 - Prob. 5P Ch. 2 - Prob. 6P Ch. 2 - Prob. 7P Ch. 2 - Prob. 8P Ch. 2 - Prob. 9P

(a) Plot the PPF graph with no curved lines Concept Introduction: Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

Concept explainers

(a)

Plot the PPF graph with no curved lines

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

(b)

The cost of producing an additional car when 50 cars are being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

(c)

The cost of producing an additional car when 150 cars are being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

(e)

What is derived about the concept of opportunity cost from the above answers.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

Chapter 2 Solutions

(a) Plot the PPF graph with no curved lines Concept Introduction: Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

Concept explainers

(a) Plot the PPF graph with no curved lines Concept Introduction: Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

(b) The cost of producing an additional car when 50 cars are being produced. Concept Introduction: Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

(c) The cost of producing an additional car when 150 cars are being produced. Concept Introduction: Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

(d) The cost of producing an additional washing machine when 50 cars are being produced and in case 150 are cars being produced. Concept Introduction: Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

(e) What is derived about the concept of opportunity cost from the above answers. Concept Introduction: Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

Chapter 2 Solutions

(a)

Plot the PPF graph with no curved lines

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

(b)

The cost of producing an additional car when 50 cars are being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

(c)

The cost of producing an additional car when 150 cars are being produced.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.

(e)

What is derived about the concept of opportunity cost from the above answers.

Concept Introduction:

Production productivity frontier: It is a curve which shows the maximum possible output of two goods with the given set of efficiently used inputs.