Q: "Since the occurrence of COVID-19 health crisis in Gaza in early 2020, several externalities existed…
A: In general due to lockdown by government as a result of covid-19,externality was there.
Q: Describe, with a diagram, what a Marginal Abatement Cost Curve shows and how it can be used for…
A: Abatement cost and Marginal abatement costs:- These costs are the price of removing undesired…
Q: 3. Suppose that the bureaucrats who run the Defense Department are budget maximizers. In dealing…
A: Congress demand for level of defense D = 16 – z P = 16 – z Cost per unit of defense = 3
Q: Consider the graph illustrating the supply, the demand, and the marginal social benefit (MSB) curves…
A: The new value of subsidy is $11223.12 and new price is $17809.14
Q: In mixed economic systems, most public goods are provided by the goveraunment becnuse O the private…
A: Mixed economy: - Mixed economy is an economy where the production decisions are taken by both…
Q: In many cities, basic education, including primary and secondary education, is highly subsidized by…
A: An externality in economics, beyond what the actor is conscious of, refers to side effects of an…
Q: Consider the case of innovating vaccines without patents (in a perfectly competitive market) (a)…
A: Externalities refer to the cost generate or benefits received by the 3rd party, wherein such a 3rd…
Q: describe the four different categories of legislation based on the distribution of costs and…
A: The four categories of legislation are based on concentrated and widespread costs and benefits.…
Q: Identify the spillover effect in each of thé followiny Ldses dnu policy to deal with this effect. a.…
A: Here the term impaired driving means that rash driving and due to such driving, there are a many…
Q: Why are efficiency taxes preferred to regulatory policies as methods remedy externalities?
A: Externalities alludes to circumstances when the impact of creation or utilization of labor and…
Q: Two towns, each with three members, are decidingwhether to put on a fireworks display to celebrate…
A: Cost Benefit Analysis: The techniques within which cost is compared with benefits to judge the…
Q: Answer the following questions for the given example: Using water pumps in homes (a) Does an…
A: Externalities are the harmful or beneficial side effects arise out of production or consumption of…
Q: Létéris paribus, goods with "positive externalities" tend to be, by the free-market private sector;…
A: Externality refers to the cost bear or benefits received by the third party economic agent who…
Q: What is the relevancy of the "Tragedy of the commons" in explaining government's intervention?
A: In economics, the Tragedy of Commons is regarded as an economic problem in which every individual is…
Q: Under which of the following conditions do positive externalities cr? O A good is produced by a…
A: Answer: B (Benefits are received by parties other than the producer or buyers of a good)…
Q: To set a 15 per cent global tax rate on multinational companies. Provide a critical economic…
A:
Q: (a) Reason out and show theoretically that except when individuals have quasilinear preferences,…
A: The quasilinear form is unique in that the demand operations for all but one of the consumption…
Q: Provide a good example of Internal Locus of Control
A: "A locus of our control (outer control direction)." (orientation of external control)"275)…
Q: the Na ove sta ffs, wha
A: (a) The Nash (NE) Equilibrium is a stable equilibrium state which is achieved by the interaction…
Q: When the government levies a tax on a good equalto the external cost associated with the…
A: Meaning of Tax Imposition: The term tax imposition or the tax hike refers to the situation under…
Q: Which of the following are devices that governments can use to achieve a more efficient allocation…
A: The efficient allocation of resources refers to the provision of resources in a fair manner. In…
Q: the effect of government regulation on auto emission is related to micro econimics or macro…
A: Microeconomics and macroeconomics are two branches of economics. Microeconomics is deals with the…
Q: Define (a) externalities and (b) sunk costs, andthen give examples of each that might be involvedin…
A: (a) Externality: A third party, who is not directly related with the exchange or production of…
Q: Using the city model from lecture, say that a city has N=1,000,000 workers, a natural advantage of…
A:
Q: The following graph provides a stylised representation of the effects of the policy proposed by the…
A: An externality is a cost or benefit incurred or received by a producer that is not paid for by that…
Q: Explain the IPAT model. How can technology either increase or decrease environmental impact? Provide…
A: IPAT:- IPAT stands for the model equation which connects environmental outcomes to 3 cause…
Q: Briefly explain the free rider problem with respect to the funding of local public schools. How does…
A: Answer given below,
Q: Question 2 [Word limit: 500] Consider the following game, called a voluntary contribution mechanism…
A: Voluntary contribution mechanism is a type of game which is used for the contribution towards public…
Q: One reason why public goods tend to be under-provided in a market economy is because each person can…
A: The public goods refer to those goods which are non-exclusive and non-rival. Non -exclusives define…
Q: Which of the following statements regarding price-based and quantity-based policies is correct? A)…
A: Option A: Incorrect A tax on carbon is not a quantity-based policy but a price based policy. Option…
Q: uppose there are three people in society who vote on whether the government should undertake…
A: Under the majority rule, the project is undertaken if the majority votes in the favor of the…
Q: Since the occurrence of COVID-19 health crisis in Gaza in early 2020, several externalities existed…
A: a. Externality is a term used in economics, refers to the costs incurred or the benefits received by…
Q: Suppose that a mayor of a large city believes strongly that education provides great benefits to the…
A: Education is considered as the example of positive externality. The term positive externality means,…
Q: A certain economy consibt ing of the two sectors of goods and servicessupports a defense system that…
A: Gross domestic product is the market value of all final goods and services produced in an economy.…
Q: Two towns, each with three members_, arc decidingwhether to put on a fireworks display to celebrate…
A: "Since you have posted a question with multiple subparts, we will solve the first three subparts for…
Q: Definitions a. Define excludability b. Define rivalry in consumption.
A: In economics, a good, service, or resource is given two essential principles- the degree of…
Q: Define social cost.
A: The private cost is the cost which is incurred by the producer to purchase the factor of production.…
Q: 11. Industrial clusters sometimes break up, with production moving to countries with lower wages.…
A: Economies of Scale refer to the gain from producing bulk. When the output of the same goods…
Q: D Quantity nd curve and marginal private and social cost curves nt of Figure 9 are two circular red…
A: Externality implies to spill-over effect of a goods or service on third party which is not…
Q: The Lucas Critique suggests that: a.Without knowing why poeple behave the way they do, empirical…
A: When talking about Lucas model, it is said that the model is primary based on rational expectations…
Q: Unity of private and social interest can only be achieved by a well-managed central planning board.…
A: In an economy, social interest refers to the activities performed in terms of exchange of ideas,…
Q: 'think about the goods and scrvia,s provided by yourlocal govenuncnta. Using the classification in…
A: When economists use the supply and demand model to explain a market, they frequently assume that the…
Q: Explain why externalities pose a problem for the utilitarian/invisible hand argument
A: The Invisible hand argument by Adam Smith Suggests that the consumers as well as the firms will…
Q: Two towns, each with three residents, are decidingwhether to put on a fireworks display to celebrate…
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: If education has private benefits to an individualas well as external benefits to society, explain…
A: An externality is said to be created when an individual takes part in an activity that also…
Q: Conversely, show geometrically the effect of a decrease in Price (i.e., BELOW the equilibrium…
A: Normally if price is below the equilibrium then it is automatically gets corrected by the market…
Q: Rational Choice
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Explain the persistence of policies that
provide concentrated benefits to a few while
imposing diffuse costs on the majority.
Step by step
Solved in 2 steps
- Analyze the role of the government with an exteranlity presentWhich 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…Draw a production possibility frontier. The vertical axis shows theproduction of public sector goods and the horizontal axis showsproduction of private sector goods. The economy is currentlyproducing at point A on the frontier where 50 per cent of allproduction is devoted to public sector goods and 50 per cent toprivate sector goods.(a) Mark the following points on your drawing.(i) Point A.(in) Point B which shows production following the election of agoverment which increases government spending on botheducation and the National Health Service.(ili) Point C where unemployment is present in the economy.(iv) Point D where the government takes over production of allgoods and services in the econory.(b) Draw another diagram putting on it the original productionpossibility Frontier you drew for (a), labelling it AA.(i) Draw a new production possibility frontier on the diagram,labelling it PP, which shows the position after a devastatingwar has hit the economy.(in) Draw another PPF…
- Two towns, each with three members_, arc decidingwhether to put on a fireworks display to celebrate theNew Year. Fireworks cost S360. (n each town, somepeople enjoy fireworks more than others.a. ln the town of Bayport. each of the residents valuesthe public good as follows:Frank $50Joe $100Call ie $300Would fi.rc\vorks pass a cost-benefit analysis?Explain.b. The mayor of Bayport proposes to decide bymajority rule and_, if the fi.re\\'Orks referendumpasses, to split the cost equally among allresidents. Who would vote in favor, and whowould vote against? Would the vote yield thesame answer as the cost-benefit analysis?c. ln the town of River Heights, each of the residentsvalues the public good aS follows:Nancy $20Bess $140Ned $160Would fireworks pass a cost-benefit analysis?Explain.d. The mayor of River Heights also proposes todecide by majority rule and, if lhc fireworksreferendum passes, to split the cost equally amongaU residents. Who would vote in favor, and \\•howould vote against?…Write down a model of positive production externality with two firms, in which theproduction activities of one firm directly affects the production/cost of the other firm.State and explain the key assumptions of the model. Using the model, answer thefollowing questions:(a) Explain why the presence of a positive production externality could prevent therealisation of an efficient outcome.(b) Name a possible cure for the positive production externality and explain how itcould solve the inefficiency problem.a. How will the imposition of the chosen government policy which is the nudge theory impact consumer surplus, producer surplus and total surplus with the effects of water pollution? (Maximum 30 words)
- Government action is based on majority rule, whereas mar- Ket action is based on mutual consent. The market allows for proportional representation of minontes. but minorities must yield to the views ol the majonty when acuviles are undertaken through government." In your own words, explain the meanine of this statement. Is the statement true? Why or why notConsider two ways to protect your car from theft.The Club (a steering wheel lock) makes it difficult fora car thief to take your car. Lojack (a tracking system)makes it easier for the police to catch the car thiefwho has stolen it. Which of these methods confersa negative externality on other car owners? Whichconfers a positive externality? Do you think there areany policy implications of your analysis?Give only typing answer with explanation and conclusion to all parts In the lectures, we dealt in detail with Ronald Coase's theorem developed in his article "The Public Price Problem". The next few questions are related to her. Answer whether the following statements are true or false by circling the appropriate word under each statement: According to Coase's theorem, static and dynamic efficiency are guaranteed in a society with sufficiently low transaction costs. True False According to Coase's theorem, with sufficiently high transaction costs, even static efficiency is not guaranteed. True False According to Coase's analyses, transaction costs matter because their size affects the scale of the market and hence (according to Smith) wealth. True False According to Coase's analyses, transaction costs matter because they influence firms' decisions about what final product to produce. True False
- What is the relevancy of the "Tragedy of the commons" in explaining government's intervention?Answer the following questions for the given example: Using water pumps in homes (a) Does an externality exist? If so, is it positive/negative (or both) (b) Use Coase’s framework to identify the cause of the externality (c) If an externality exists, determine whether the Coase theorem applies (i.e. is it possible/feasible to assign property rights and solve the problem?). Provide reasoning. (d) If an externality exists and the Coase theorem does not apply, discuss a government/institutional solution that can mitigate the problem of externality. Provide reasoning.a) State the condition for the Pareto optimal provision of a public good. Interpret the condition. b) Consider agent A with (inverse) demand curve for the public good and agent B with inverse demand , where prices are measured in £ per unit. The marginal cost of producing the public good is £10 per unit. What is the Pareto efficient level of the public good? Explain. Illustrate in a graph. [Hint: Compute the marginal social benefit of the public good by adding up the demand curves vertically, over the p’s] c) Describe the Vickrey-Clarke-Groves (VCG) Mechanism, provide examples and discuss problems with the VCG mechanism.
