Refer to Figure 10-2. At Q3, how does a consumer value the cost of the product? The marginal consumer values this product less than the social cost of producing it. Every consumer values this product less than the social cost of producing it. The cost to society is equal to the value to society. The marginal consumer values this product more than the private cost.

Refer to Figure 10-2. At Q3, how does a consumer value the cost of the product? The marginal consumer values this product less than the social cost of producing it. Every consumer values this product less than the social cost of producing it. The cost to society is equal to the value to society. The marginal consumer values this product more than the private cost.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter10: Externalities

Section: Chapter Questions

Problem 3PA: Greater consumption of alcohol leads to more motor vehicle accidents and, thus, imposes costs on...

See similar textbooks

Similar questions

PDemand QDemand PSupply QSupply $10 0 $1 2 $9 3 $2 4 $8 6 $3 6 $7 9 $4 8 $6 12 $5 10 $5 15 $6 12 $4 18 $7 14 If the Government creates a quota of 6 units to reduce the consumption of the dangerous product, what will the price of the good be in the marketplace? How much deadweight loss is there? How much of the deadweight loss came from the consumers?
4a) The market tends to ___________ private goods a) underproduce b) overproduce c)correctly produce 4b) Public goods _______________ private goods a) underproduce b) overproduce c) correctly produce
Please answer the following questions.1. Explain the factors affecting Demand.2. Explain the difference between positive and negative externalities alongwith an example.3. How are public goods different from private goods?4. Explain the Law of Supply.5. With regard to demand and Supply, explain the point of MarketEquilibrium.
1. Illustrate and explain the simultaneous impact of TRAIN law on the lower income group’s consumption of instant coffee. Compare and contrast the equilibrium price and quantity before and after the implementation of the law. 2. Illustrate and explain why there are very little clean Public Comfort Rooms that are free or are donation-based. Provide a possible solution to this problem (15 pts) (hint: analyze public CR as a positive externality) 3. Do you think that the TRAIN law was/is successful as a pro-poor taxation program? Why or why not?
Give typing answer with explanation and conclusion Education leads to public benefits above and beyond those enjoyed by individuals deciding on whether or not to enroll in college. The government is weighing an education policy intervention. In this context, which of these statements is true? a. Leave this market alone; it is efficient and welfare is already maximized. b. A Pigouvian tax on tuition will improve efficiency in this market by aligning private costs and social costs. c. Giving a tax break to families with children enrolled in college will improve market efficiency. d. College is already too expensive. Setting a binding price ceiling on tuition will improve market efficiency
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…
8-) Bill’s demand for hamburgers (a private good) is Q=20–2P and Ted’s demand is Q=10–P.a. Write down an equation for the social marginal benefit of the consumption of hamburgers.b. Now suppose that hamburgers are a public good. Write down an equation for the social marginal benefit of hamburger consumption.
The Australian government have suggested that they might need to increase GST to help fund the COVID-19 rescue package. GST is a tax on goods and services usually paid at the point of sale. Consider the market for bread. Suppose a loaf costs $4.15 and includes a 15-cent tax per loaf. q5-Why would this tax be both socially inefficient and inegalitarian? Use the concepts of deadweight loss and wealth inequality.
Consider a municipality with three types of households: A, B, and C. The municipality provides z units of the public good, z. The demand for the public good differs across household types:DA= 50 − z , DB= 30 − 3/5z, DC= 20 − 2/5z. These functions give each type’s willingness-to-pay (WTP) for a level of z.a) Find the social benefit curve, DΣ, if there is one household of each type in the municipality. Graph each demand curve and the social benefit curve. b) If the marginal cost of the public good is 25 per unit, find the socially optimal level of the public good, z∗. c) If the public good is financed by a per-household tax, compare the level of public good provision with the majority voting to the socially optimal level.
Consider the model of a rational consumer that cares about consumption of private goods and consumption of broadcast public television (a public good). Suppose that the total level of broadcast public television provided through voluntary contributions is 10 hours of programming. Then the government decides to raise money through a tax and provide 10 hours of programming to the public. What would we predict about crowd-out of voluntary contributions to broadcast public television when government does this? How would the answer change if consumers get warm glow utility from donating to broadcast public television in addition to utility from the public television itself? (Be specific.)
Table: Security in a Residential Community Quantity ofSecurityGuards TotalCost Total IndividualBenefit toEach Resident 0 $0 $0 1 $150 $10 2 $30 $16 3 $450 $18 4 $600 $19 Reference: Ref 17-3 Table: Security in a Residential Community (Table: Security in a Residential Community) Use Table: Security in a Residential Community. Suppose that the residential community has 100 residents. The marginal cost of hiring the second security guard is _____, and the marginal social benefit is _____. Select one: a. $150; $600 b. $450; $1,800 c. $450; $600 d. $150; $200
Your grandmother likes old-fashioned yard salesand doesn’t understand why everyone is so excitedabout eBay. Explain to her why the creation of amarket that enables people who don’t live in thesame town to buy and sell used goods increasestotal surplus over the yard-sale market.