Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 30.1, Problem 1ST
To determine
Distinguish market output and social optimal output.
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Chapter 30 Solutions
Economics (MindTap Course List)
Ch. 30.1 - Prob. 1STCh. 30.1 - Prob. 2STCh. 30.2 - Prob. 1STCh. 30.2 - Prob. 2STCh. 30.2 - Prob. 3STCh. 30.2 - Prob. 4STCh. 30.3 - Prob. 1STCh. 30.3 - Prob. 2STCh. 30.3 - Prob. 3STCh. 30.4 - Prob. 1ST
Ch. 30.4 - Prob. 2STCh. 30.4 - Prob. 3STCh. 30.5 - Prob. 1STCh. 30.5 - Prob. 2STCh. 30.5 - Prob. 3STCh. 30 - Prob. 1QPCh. 30 - Prob. 2QPCh. 30 - Prob. 3QPCh. 30 - Prob. 4QPCh. 30 - Prob. 5QPCh. 30 - Prob. 6QPCh. 30 - Prob. 7QPCh. 30 - Prob. 8QPCh. 30 - Prob. 9QPCh. 30 - Prob. 10QPCh. 30 - Prob. 11QPCh. 30 - Prob. 12QPCh. 30 - Economists sometimes shock noneconomists by...Ch. 30 - Prob. 14QPCh. 30 - Prob. 15QPCh. 30 - Prob. 1WNGCh. 30 - Prob. 2WNGCh. 30 - Prob. 3WNG
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- Consider a small town with a factory that produces cell phones. The factory's production causes air pollution, which affects the health of the residents. Draw a graph representing the market for cell phones in this town. Label the socially optimal level of output and the market equilibrium level of output. Explain the difference between the two levels.arrow_forwardHow would an economist answer the question: "What is the socially best amount of pollution control?" Will that likely be zero pollution?arrow_forwardwhy do externalities make market outcomes inefficient?arrow_forward
- The diagram to the right depicts the market for cough medicine in a small town. The quantity of cough medicine is measured in bottles sold per week; price is measured in dollars. The townspeople are happier and healthier because people who have colds and flus buy and take the medicine and reduce the spread of infection. What is the socially optimal number and price of cough medicine? $28- $24- ..... The socially optimal equilibrium occurs at a quantity of bottle(s) and a price of $ $20- $16- S $12-$11 $10 $8- $4- DA Q 16: 20 $0- 10 20 30 40arrow_forwardDefine social cost.arrow_forwardIf there are no externalities or market power and all markets are in equilibrium, what conclusions can we draw from this in economic theory?arrow_forward
- The following graph represents the market for high-emissions cars. Answer this question assuming that the externality is not internalised. Which quantity is socially optimal (i.e. what is the efficient quantity)? What is the deadweight loss generated by the externality?arrow_forwardBecause the free market (competitive) equilibrium maximizes social efficiency, why would the government ever intervene in an economy?arrow_forwardWhat 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_forward
- How do property rights affect externalities and market failure? Do goods and services by definition have to be considered a property right? Are there any examples in which that may not be the case?arrow_forwardTrue or false and use a graph to explain: the socially optimal level of pollution is zero.arrow_forwardConsider a common resource good like a free camping ground next to a lake. a. What is the inefficient outcome generated in this example if the quantity of people using the camping ground was determined by a free market relative to the social optimum? What causes this inefficient outcome? b. Propose one way in which to solve the inefficient outcome described above.arrow_forward
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