How does the price elasticity of demand for gasoline impact the effectiveness of taxes on gasoline aimed at correcting a negative externality?

Q: Consider Good A.  There are NO externalities associated with Good A.   a.)  Draw a ( general- you…

A: The tax refers to the mandatory charge to be paid by the individuals and firms to the government. It…

Q: True or False? In the presence of a positive externality, a Pigouvian subsidy results in less…

A: Positive externality refers to the situation when the action of an individual contributes positively…

Q: ) Show the government solution to a positive externality (in a graph), and the government solution…

A:

Q: Which of the following statements is TRUE?I. A Pigouvian subsidy reduces the market price to…

A: Both I and II are true. 3rd statement is not true as deadweight loss can also occur is positive…

Q: Provide an example of a positive and a negative externality. Explain your examples.  Are there…

A: Provide an example of a positive and a negative externality. Positive externality :-  Development…

Q: What difficulties occur when government attempts to use Pigouvian Taxes/Subsidies to address…

A: Pigouvian taxes are theoretically the taxes to be imposed on economic activities resulting in…

Q: If producing a good creates a negative externality, we will have a social cost curve that is…

A: In a market, when there is a negative externality associated with the production of a specfiic good,…

Q: suppose that scientists discover that this particular product has a significant Positive…

A: Dead Weight Loss: A deadweight loss could be a social group price incurred as a result of market…

Q: Assume there is a positive externality associated with having a tertiary education. Is the…

A: A positive externality means the due to the production of the product the society will get the…

Q: "A Pigouvian tax will be more effective in remedying a negative externality, the more elastic the…

A: The Pigouvian tax is a type of emission tax which imposed to reduce the external cost created by…

Q: Why are taxes, one traditional remedy for negative externalities, less than ideal for smoking…

A: Externality is the term refers the benefit enjoyed or cost suffered by the third party who did not…

Q: Providing a subsidy is one way a society can correct for a positive externality. True False

A: Externality refers to spill-over effect of a good on third party which is not involved in either…

Q: Suppose the supply curve of a product is given by P = 5 + 0.1Q, where P is the daily rent per unit…

A: The supply curve may be a graph that shows the connection between the price of a trade goods or…

Q: Compared to a good with no externalities, a good with a negative externality will appear to have…

A: When the consequence of producing or consuming goods and services has the effect of imposing costs…

Q: The market for plasticans is perfectly competitive. Market Supply is given by Q=3P and Market Demand…

A: Negative externality is negative spillover effects on third party or on society.

Q: Why are taxes, one traditional remedy for negative externalities, less than ideal for smoking…

A: Correct option is (1).

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: The market for used phones is perfectly competitive without externalities. Market demand is Q=378-2P…

A: Given:  Marked Demand:Q=378-2PMarket Supply: P=2Q+5-2Q=5-P2Q=5+PQ=52+P2Q=2.5 +0.5PNow, Equilibrium…

Q: a) it is better than efficient b) the price of the product is too low c) the price of the product is…

A: The positive externalities are positive side effects of consumption or production that are not…

Q: What areas in the above graph represent the tax revenue from a Pigovian tax that internalizes the…

A: A Pigovian tax is a tax placed on any good which creates negative externality.

Q: The market for plasticans is perfectly competitive. Market Supply is given by Q=4P and Market Demand…

A: In economics, efficiency means that improving one party's situation without imposing a cost on…

Q: corrective (or Pigovian) tax causes deadweight loss, in the presence of a negative externality.…

A: Pigouvian Tax is imposed on market transactions, which creates negative externalities for…

Q: Environmental taxes tend to be regressive because... only income taxes can be progressive. O they…

A: A tax is regressive if people having higher (lower) income bear a lower (higher) proportion of their…

Q: The people of Chingola district a town in the Copperbelt province of Zambia are concerned over the…

A: Externality means spillover effect of economic activities motivated by profit or satisfaction on…

Q: The following graph provides a stylised representation of the effects of the policy proposed by the…

A: An externality is defined as the action by one party which impacts a third party either positively…

Q: The market for plasticans is perfectly competitive. Market Supply is given by Q=5P and Market Demand…

A: Supply function Q=5P P = Q/5 MPC = Q/5 , where MPC = Marginal private costs Market Demand is given…

Q: Subsidies are   A. all of the other answers.   B. rewards for those receiving a positive…

A: Subsidies are paid by the government to owners of goods and services for various reasons. Sometimes…

Q: According to a report from the US Census Bureau, "the average lifetime earnings of a full-time year…

A: An externality is a cost or benefit which imposed on a third party and not incurred or received by…

Q: Consider a good with positive externalities. Relative to the outcome of an unregulated market, a…

A: Positive externalities occurs when prices are lower and quantities are higher.

Q: Discuss how compensation differs from taxation as a solution to the externality problem? use graphs…

A: As a solution to the externality problem, compensation differs from taxes in that:

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: If the mining of gold yields a negative externality, then the social cost curve lies the supply…

A: Externality is the cost or benefit that the market transaction brings to the third party. It can be…

Q: Price elasticity of demand for cigarettes is relatively inelastic at low prices and relatively…

A: Price elasticity of demand measures the degree of responsiveness of the quantity demanded of the…

Q: Let Q be quantity of beer (in packs) consumed in the US. Assume beer consumption imposes a negative…

A: * SOLUTION :-  * Private equilibrium : 100 - 2Q = 10+Q => 100-10 = Q+2Q   3Q = 90    Q = 30 and…

Q: The government can encourage the production of goods that create positive externalities by creating…

A: Posstive externality: when production of a goods enhanced the welfare of the parties that are not…

Q: The result that, under certain conditions, government intervention is unnecessary to fix a negative…

A: Nash equilibrium-It is a solution to a game involving two or more players which provides the best…

Q: Some countries, such as Germany, have a mixture of highways with no speed limits and other roads…

A: Speed limit is an essential way to reduce collision of the vehicles which must be fallowed by the…

Q: Which of the following statements about a market that is aftected by a positive externality is…

A: Externalities refer to the costs or benefits of an economic transaction incurred by a third party…

Q: Why does a tax in an efficient market decrease total surplus, while a tax in amarket with a negative…

A: A tax refers to a financial charge imposed by the government on the sellers or consumers. It is…

Q: Which of the following instruments is government most likely to apply when confronted with a…

A: Positive externality occurs when production or consumption results in external benefits on third…

Q: Explain how subsidies provided by the government to producers solve their externalities

A: A government subsidy is the amount of money that individuals and corporations receive as benefits…

Q: In which way could smoking exert a positive externality on others?

A: Externality refers to a situation when some third party who is not directly involved in the market…