The free-rider problem occurs when: buyers pay less than their reservation price. sellers receive more than their reservation price. people who do not pay for a good or service cannot be excluded from enjoying it. people who pay for a good or service cannot be excluded from enjoying it.
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- What"s correct when the government requires those buying a vehicle to provide a parking space prior to granting of vehicle registration documents. A. it is unfair because there have been many who were granted registration of vehicles without complying with this rule B. it is commendable because it eliminates negative externalities C. it is to be completely opposed because it will be another source of corruption D. A and B are correct E. B and C are correctWhen consumers pay less for something than it is worth to them, they receive a(n) ______. Question 1 options: a) external benefit b) deadweight loss c) producer surplus d) consumer surplus Question 2 At the equilibrium quantity, _________________. (choose all that apply) marginal benefit equals marginal cost the sum of consumer surplus equals the sum of producer surplus the quantity demanded equals the quantity supplied The minimum price that producers must receive to induce them to produce another unit of a good or service is equal to the good's ______. Question 3 options: a) marginal cost b) marginal benefit c) producer surplus The gains from trade for consumers are measured by ______. Question 4 options: a) external benefits…The market for used phones is perfectly competitive without externalities. Market demand is Q=235-2P and Market Supply is P=2Q+11. Suppose the Marginal Cost (MC) increases by $10 at every quantity. What is market Producer Surplus after this increase in MC? (Note: this question is not asking for the change in PS, just the PS after the increase in MWTP) Enter a number only, drop the $ sign
- He bought a cell for $579. He doesn't like it anymore and posts it on instagram. He is willing to sell it if he gets a minimum of $194 for it. Someone is interested in the cell and is willing to pay a maximum of $504 for the cell. They negotiate and he sells her the cell at a price of $124. What is the total surplus created by him selling the cell to her? Assume no externalities. Include a negative sign if needed.Externalities Mark owns a butchery. His marginal cost of selling meat is MC = 0.35Q, where Q is the pounds of meat he sells. Mark is in a competitive market and can sell all the meat he wishes for $7 per pound. However, the smell from the butchery bothers the customers of George, the owner of the coffee shop next door. Assume that every pound of meat costs George $1.4 worth of lost business. If Mark focuses on maximizing his profit, how much would he sell? At the profit-maximizing quantity from part a, does selling the last pound of meat benefit the society. Calculate the social marginal cost and compare it to the marginal benefit. Note that here “society” refers to Mark and George. What is the socially optimal quantity of meat sold?(MCQ) If there are no externalities a competitive market achieves economic efficiency. If there is anegative externality, economic efficiency will not be achieved because a. too much of the good will be produced. b.a deadweight loss will occur that is equal to the area under the demand curve for the good. c.too little of the good will be produced. d.economic surplus is maximized
- Excessive consumption of soft drinks is positively correlated to the incidence of diabetes. Assume that the private total cost of production is PTC(Q)= Q^2 + 2Q.The social cost of soft drinks production is STC(Q)=11.5Q^2.The total benefit of soft drinks production is TB (Q)=50Q-Q^2.What quantity of soft drinks would be produced in a perfectly competitive market? What tax should the government impose to achieve the socially optimum quantity of soft drinks traded?The market for used phones is perfectly competitive without externalities. Market demand is Q=271-2P and Market Supply is P=2Q+18. What is market Consumer Surplus? Enter a number only, drop the $ sign.Excessive consumption of soft drinks is positively correlated to the incidence of diabetes. Assume that the private total cost of production is PTC(Q)= Q^2 + 2Q. The social cost of soft drinks production is STC(Q)=11.5Q^2. The total benefit of soft drinks production is TB (Q)=50Q-Q^2. What quantity of soft drinks would be produced in a perfectly competitive market? What tax t(s) should the government impose to achieve the socially optimum quantity of soft drinks traded?
- How market equilibrium is found with Pollution Abatement Subsidy? NOTE: GRAPGH IS NECESSARY IN EXPLANATIONInverse demand for washing machines is P = 27-.5Q and inverse supply is P = 7+.5Q. Each washing machine has a 3 unit externality associated with it. Find the market equilibrium, damages, deadweight loss, consumer, producer, and total surplus. Submit your workThere is a bar on Off‐Main Street called the Rock‐n‐Roll Bar. All the people that go to that bar like to listen to rock‐n‐roll music, and they love live bands. If the bar owner brings bands in to play music on a Saturday night, she will make a lot of money. However there are tenants in this building who get annoyed by the loud music. The benefits/costs to the owner/tenants of having zero, one, two or three bands on a Saturday night are listed below. If the tenants have the right to be free of loud music enforced through aproperty rule, how many bands will play in Rock‐n‐Roll Bar on a Saturday night? A. ZeroB. OneC. TwoD. ThreeE. It depends on transaction costs
