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- A non-rivalrous, non-excludable public good sells for p = 40 dollars per unit. Roommates A and B have marginal benefits for this public good given by mbA = 50 – q and mbB = 50 – q. How many units of this public good should the roommates purchase if they act cooperatively? Round final answers to 2 decimal places.The tragedy of the commons refers to the: underproduction of public goods in economic markets. O underproduction of a common good. 4 O overuse of a rival but nonexcludable good. O overuse of a nonrival and nonexcludable good.Both public good;; and common resources involve b. How can the government solve the problemexternalities. caused by people like Fredo?a. Arc t~ extemalities associated with public goodsgenerally positive or negative? Usc examples in your answer. Is the froe. market quantity of public goods generally greater or Less than the efficientquantity?b. Are the externalities a.;;sociated with commonresources generall)' positive or negative? Uscexamples in your answer. Is the free·market usc ofcommon resources generally g:reatc.r or less thanthe efficient use?
- (a) Explain the difference between a positive externality and a negative externality and why each result in an equilibrium point that is not optimal for society. (b) which externality results in an equilibrium quantity that is higher than the optimal social quantity of a good? (c) how can the impact of the externality in part b be corrected?1. What is an example of a good that has become a public (or quasi-public) good due to technology? 2. Explain how technology has made this good non-rival in consumption or non-excludable. 3. Is there a free rider problem in the good you mentioned? How can the free rider problem be addressed in that example?When economists say that one of the characteristics of a Public Good is that it is “non-excludable”, they mean: Select one: a. that the government makes the good widely available to virtually anyone in the economy. b. the good’s price is so low that virtually anyone can afford it. c. that once the good is supplied, it is difficult to prevent those who do not pay for it from consuming the good. d. that once a unit of the good is provided, it can be jointly consumed by more than one consumer at the same time.
- Which one of the following is a definition of a merit good? A) Services which can only be provided by the government through taxesB) Goods which provide cear social and private benefits to consumersC) A good which can be produced by the market but would likely be under-consumedD) Goods which are beneficial in consumption but consumers are unaware of the extent of the benefitsE) Goods which are not capable of being provided by the market because they are excludable and rival Merit goods are an example of which of the following problems in economics:A) Free riderB) Principal-agentC) Tragedy of the CommonsD) Intertemporal choiceE) Excludable, non-rival goods provision De-merit goods have characteristics that if left the market mechanism, they are over consumed and impose private costs on the individual consume them, and also have wider social costs. Which of the following ways in which a government might seek to reduce consumption of of merit costs? Check all the apply A) Impose…Consider a market in which it production process pollute the local water source for the community.Due to lack of transparency governance, local authority does not have any regulation in place todeal with such problem. [Easier to explain when drawing a demand and supply diagrams.]a. Would this market that was characterized by unregulated (water) pollution beclassed as efficient? Why or why not? Does this mean that the consumer surplus is negative?b. In this particular case, would tradeable pollution permits consider to be a moreefficient way to reduce pollution than Government regulation? Explain your answer.Negative Externalities are:A. External BenefitsB. Non-excludableC. External CostsD. Non-Rivalous What term was coined by Adam Smith and is a metaphor for an economic guidance system that leads to desirable economic outcomes? A. Competition B. Price mechanism C. Capitalism D. "The invisible hand" What are the two characteristics of a public good? (Choose 2)A. External CostB. Non excludableC. External BenefitD. Non-Rivalous
- Four roommates are planning to spend the weekend in their dorm room watching old movies, and they are debating how many to watch. Here is their willingness to pay for each film. DongJu Dinh SangMin HyungSeok First film $7 $5 $3 $2 Second film 6 4 2 1 Third film 5 3 1 0 Fourth film 4 2 0 0 Fifth film 3 1 0 0 1) Within the dorm room, is the showing of a movie a public good? Why or why not? 2) If it costs $8 to rent a movie, how many movies should the roommates rent to maximize total surplus? 3) If they choose the optimal number from part 2) and then split the cost of renting the movies equally, how much surplus does each person obtain from watching the movies? 4) Is there any way to split the cost to ensure that everyone benefits? What practical problems does this solution raise? 5) Suppose they agree in advance to choose the efficient number and to split the cost of the movies equally. When DongJu is asked his…Give typing answer with explanation and conclusion Why the market tends to fail when dealing with environmental issues? It is said many externalities in environmental economics have features that are similar to that of public goods. We know that the provision of some public goods such as lighthouse can be solved through the market rather effectively. What makes environmental goods such as clean air different from other public goods such as lighthouse? Why is it more difficult to solve the provision of clear air through the market?Based on what you saw in the videos about internalizing externalities, do you think that the "leaving it to the market" approach (i.e., market-based solutions, such as government-imposed incentives toward renewable energy initiatives) is sufficient to transition away from fossil fuels and a linear economy as we try to minimize the already visible impacts of climate change? Or, do you think that a command and control approach is warranted in this case? Explain. Note: I am not judging your position, but am looking at how you support your position given the fundamentals of command and control vs. market-based solutions given our current climate crisis.
