1. Social Benefit and Social Cost For the following statements: (1) identify if there is an externality or not; If yes, (2) classify them as: positive or negative; (3) If the externality happens during the consumption or production of the good; and, finally, (4) draw a graph with the marginal private and social benefit and the marginal private and social cost. (a) Driving a non-electric-car generates carbon dioxide emissions. (b) Getting a good education improves your productivity. (c) Developing open-source software makes new tools available for developers. (d) A Youtuber makes loud noises in the middle of the night while recording videos. (e) A person is blasting music on the subway.

1. Social Benefit and Social Cost For the following statements: (1) identify if there is an externality or not; If yes, (2) classify them as: positive or negative; (3) If the externality happens during the consumption or production of the good; and, finally, (4) draw a graph with the marginal private and social benefit and the marginal private and social cost. (a) Driving a non-electric-car generates carbon dioxide emissions. (b) Getting a good education improves your productivity. (c) Developing open-source software makes new tools available for developers. (d) A Youtuber makes loud noises in the middle of the night while recording videos. (e) A person is blasting music on the subway.

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter17: Externalities And The Environment

Section: Chapter Questions

Problem 2.3P: (Negative Externalities) Suppose you wish to reduce a negative externality by imposing a tax on the...

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(Negative Externalities) Suppose you wish to reduce a negative externality by imposing a tax on the activity that creates that externality. When the amount of the externality produced per unit of output increases as output increases, the correct tax can be determined by using a demand-supply diagram; show this. Assume that the marginal private cost curve slopes upward. Negative Externalities: The Market for Electricity in the Midwest:
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