In the presence of external costs, untaxed or unregulated production is said to be.......................with a price that is................. a)too high; too high b) too high; too low c) too low; too high d) too low; too low
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- A chemical company can produce Q units of a chemical H, with marginal costs of MC = 9 + Q, and can distribute the chemical at marketing marginal costs of MC = 1. The demand for H is given by P = 30 - 1.5Q. If an external market exists where H can be bought or sold without marketing expenses for $13, how much H should the firm produce? 4 units 10 units 7 units 5 units 0 unitsIf production of a good is known to create external benefits a. Those benefits are larger than those received by the consumers of that good b. Those benefits are smaller than those received by the consumers of that good c. Those benefits are the same as those received by the consumers of that goodIf the market for the resource were allowed to go to equilibrium in the first generation, without any regulation, what area(s) would represent(s) the total benefits obtained by the second generation? C+D+E D+E E D B+C+D+E
- Which is the correct answer? To be a Pareto-efficient, a competitive market in long-run equilibrium needs: a. Marginal external costs are = 0 b. Marginal private costs are above marginal social costs. c. Marginal private costs are below marginal social costs.Compared to ideal economic efficiency, when the production of a good generates external benefits, competitive markets will likely result in an output that is too A) large and a price that is too high. B) large and a price that is too low. C) small and a price that is too high. D) small and a price that is too low.Which of the following is NOT a possible way of solving an externality problem of electricity production using coal? A. A quota of electricity production using coal exactly equal to the production level in the socially optimal allocation. B. A ban on coal burning, in order to force the use of alternative energy sources. C. Issue trading rights to burn coal for electricity production, and let a market decide the clearing price for those rights. D. A per-unit tax on the electricity price equal to marginal external cost of burning coal at the socially efficient allocation.
- Consider a competitive market for single-use plastic bags. Market demand is given by P=15 - Q/500, where P is the market price and Q is the quanity demanded. The marginal cost of producing plastic bags is constant, resulting in a market supply curve given by P = 3. However, every single-use plastic bag generates an external cost equal to Q/500 (note: it is increasing in the quantity produced). Hence the marginal social cost is MSC = 3 + Q/500. If the externality is not addressed (or internalised), what is the value of the deadweight loss? Briefly explain why it exists and what it captures.Q7 Natural barriers to entry into an industry include... a. Control or ownership of the entire supply of an essential raw material. b. A government-awarded franchise. c. Large economies of scale in the industry. d. A patent which allows production by only the patent holder. e. Increasing-cost production.For a competitive market in long-run equlibrium to be Pareto-efficient... Select one: a. Firms do not make profits of any kind b. Marginal private costs are below marginal social costs c. Marginal private costs are above marginal social costs d. Marginal external costs are zero
- Considering the elements in the external environment, it is correct to say that ______. Question 37 options: A) All of these are true. B) the socio-cultural environment has become less important in recent years because of the increasing diversity of the population in Canada. C) the boundary between a company and the political-legal environment is more porous than the boundary between a company and the socio-cultural environment. D) The economic environment will affect the performance of almost every business. E) the political-legal environment is something that cannot be influenced by Canadian business firms.Give three examples of activities accompanied by external costs and benefits.it is microeconomics If a firm does not pay for an external cost, who does? Why might there be a deadweight loss in a positive externality situation, when the amount bought and sold in the market is below the market optimal equilibrium amount? Why might private firms not want to produce certain types of goods? Start a New Thread
