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- Indicate whether the statement is true or false, and justify your answer.In the presence of externalities, private and social welfare diverge.Suppose a positive externality is associated with college enrollment. Assume that college instruction is sold in a competitive market and that the marginal social cost of providing it increases with enrollment. Show how a corrective subsidy to college students will increase the market price of instruction. Show the net gain in well-being possible from the subsidy and the amount of tax revenue required to finance its costs on your graph. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.A medical vaccine is produced and sold in a perfectly competitive market. Assume that the medical vaccine generates a positive externality in consumption within the society. (a) Draw a properly labeled graph for a competitive market providing this medical vaccine and show each of the following. (i) The market equilibrium quantity, labeled QC (ii) The socially optimal quantity, labeled QS (iii) The area of the deadweight loss, shaded completely (b) Identify one policy action that would lead to the production of the socially optimal quantity of the vaccine. (c) Would a binding price ceiling result in the production of the socially optimal quantity of the vaccine? Explain.
- Discuss carefully how welfare changes when the ULEZ policy is introduced. Is the social welfare higher under the ULEZ policy than without it? Which group benefits from the policy and which group is harmed by it? How does the cost of pollution C(x1, x2) change when the policy is introduced? What is the intuition behind these changes? [Suggested word count: 100 words]Indicate whether the statement is true or false, and justify your answer.Herd immunity is a negative health externality.Do COVID-19 Vaccines create external benefit? Why? Then should the government subsidize this activity?
- Sketch an externality graph (model) that is positive and demonstrates the vaccine market. Make sure to label the private vaccine usage amount (the amount of vaccines that are used in the market if the market is left to its own devices to find an equilibrium.) As well, mark the socially optimal level of vaccine usage if the gov. involves itself to reach a level of vaccine usage that gives all individuals protection from a deadly virus. Describe what the governments reason may be to select to subsidize the market for vaccines?Indicate whether the statement is true or false, and justify your answer.A Coasian approach may not succeed in achieving a socially optimal level of organ transactions.How to draw the market equilibrium quantity of the vaccine diagram?
- Suppose that flu shots create a positive externality equal to $10 per shot. Further suppose that the government offers a $7-per-shot subsidy to producers. What is the relationship between the equilibrium quantity and the socially optimal quantity of flu shots produced? Group of answer choices They are equal. The equilibrium quantity is greater than the socially optimal quantity. The equilibrium quantity is less than the socially optimal quantity. There is not enough information to answer the question.Discuss and show how the social preferance of altruism can be a potential solution to the social dielemma of the covid vaccine rolloutFor public goods such as bus service, sewage services, power grids,water systems, roads, vaccines, education, law and order, reliableknowledge, and many others, the marginal cost of providing anamount q, MC(q), is positive but decreasing. Suppose that thedemand curve for the good is D(q), i.e. D(q) is societal willingnessto pay for the marginal unit of the public good at level q, D(q) 0and D0(q) < 0. This problem asks you to compare several methodsof deciding how much q to provide.(a) Produce using the competitive rule, p = MC(q). The solutionis denoted qcomp ∗ .(b) Produce as a Monopolist, i.e. solvemaxq≥0 qD(q) - C(q):The solution is denoted qMon ∗ .(c) Produce so as to maximize social surplus from the industry, i.e.solve the problemmaxq≥0 [CS(q) + qD(q)] - C(q);where CS(q) = R0q[D(x) - D(q)] dx is consumer surplus. Thesolution is denoted qISS ∗ .(d) Produce so as to maximize the total social surplus, i.e. solve theproblemmaxq≥0 [B(q) + CS(q) + qD(q)] - C(q);
