Essentials Of Economics, Loose-leaf Version
8th Edition
ISBN: 9781337096898
Author: N. Gregory Mankiw
Publisher: South-Western College Pub
expand_more
expand_more
format_list_bulleted
Question
Chapter 11, Problem 7PA
Subpart (a):
To determine
Cost benefit analysis.
Subpart (b):
To determine
Cost benefit analysis.
Subpart (c):
To determine
Cost benefit analysis.
Subpart (d):
To determine
Cost benefit analysis.
Subpart (e):
To determine
Cost benefit analysis.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
a. When a firm imposes an external social cost (negative externality), the government should impose a tax on production equal to the externality cost to ensure that the market will achieve the socially optimal outcome.
Select one:
True
False
b. The socially optimal level of emissions of most pollutants is zero.
Select one:
True
False
c. Externalities are only inefficient when they impose a cost. They are not inefficient when they bestow a benefit.
Select one:
True
False
What is the concept of a negative externality in economics? A. A benefit received by individuals who did not incur the cost B. A cost incurred by individuals who did not receive the benefit C. A situation where external parties receive equal benefits and costs D. A situation where the government intervenes in the market
Consider a market with a positive externality. The market will tend to.... the good because the market participants tend
to ignore the.... of their decision.
A. underproduce; external social benefit
B. overproduce; external social benefit
C. underproduce; private benefit
D. overproduce; private benefit
Explain why.
Chapter 11 Solutions
Essentials Of Economics, Loose-leaf Version
Knowledge Booster
Similar questions
- Problem 1: Externality The weekly supply and demand for packs of cigarettes in the United States is given in the figure below. Suppose cigarette smoking causes an external cost on nonsmokers, as shown by the social benefit curve on the graph. Price ($) 36 34 32 30 - 28 26 - 24 22 - EMC S SEMC pvt 20 - 18- 16 - 14 - 12 - 10- 8 MB pvt social 2 MB 10 12 14 16 18 20 22 24 26 28 30 32 Pack of cigarettes (millions) a. This is a [ Select ] [ Select ] externality.arrow_forwardAn externality is the impact of: a. None of the answers is correct. b. one person’s actions on the well-being of another person c. a person’s actions on his well-being.arrow_forwardWhat is the economist’s definition of public goods? Why are public goods associated with market failure? How do the free rider problem and shirking contribute to this form of market failurearrow_forward
- Question 19 Which of the following best captures the notion of external cost? a. Drugs damage the health of the user. b. Floods reduce the output of commercial farms. c. Passive smoking damages the health of nearby non-smokers. d. a smaller harvest leads to lower income for farmers. Question 20 The optimal level of output can be achieved by levying a tax on a company producing a negative externality. This should be set a level that is equal to: a. the marginal cost of a curve b. the social marginal cost curve c. the difference between the social marginal cost and the firm's marginal cost. d. the total of the social marginal cost and the firm's marginal cost. Question 21 If we assume that making and consuming a product leads to externalities, which of the following would be the Pareto efficient level? a. If marginal private benefit matches marginal social benefit. b. If marginal social cost matches marginal social benefit. c. If marginal private cost matches marginal private benefit. d.…arrow_forwardWhat is a public good? What are its two defining characteristics? Provide an example.arrow_forward1. The Government of Yokuku considers applying one of the following policies: a tax or a standard, in order to reduce pollution level from P to Po. The government economist drew the following graph, representing the marginal abatement cost (MAC) to the polluters, the marginal damage to the society (MD), the optimal tax level (Tax level) and the socially optimal pollution level (Po). 1.1. What is the total tax cost under the standard policy?a. There is no tax cost under the standard policyb. Bc. Cd. B+C 1.2. What is the total tax cost under the tax policy?a. There is no tax cost under the tax policyb. Bc. Cd. B+C 1.3. What is the total social cost under tax policy?a. A+2B+Cb. A+Bc. B+Cd. A+B+Carrow_forward
- Choose a good or service that you would like to see the government provide more funding towards. 1. Explain how this good or service might be considered a public good. 2. Explain how this good or service might be an example of a positive externality problem.arrow_forwardAn externality is Select one: a. a market equilibrium tax. b. the costs that parties incur in the process of agreeing and following through on a bargain. c. the uncompensated impact of one person's actions on the well-being of a bystander. d. the proposition that private parties can bargain without cost over the allocation of resources. Checkarrow_forwardQUESTION 38 | To internalize a positive externality: a. the consumers of a good could receive a subsidy equal to the external benefit resulting from the production or consumption of the good. b. a producer's costs could be increased by an amount equal to the external benefit resulting from the production of the good. c. consumers of the good could pay a tax equal to the external benefit resulting from the production or consumption of the good. d. Both (a) and (c) are correct O E O O O D B A с e. none of the abovearrow_forward
- The residents of Orléans, Ontario enjoy seeing fireworks over Petrie Island on Canada Day. Each of the community's 1000 residents places a $5 value on the experience. a. What are the defining characteristics of a public good? b. If the cost of putting on a fireworks display is $1000. Would it be socially optimal to have a Canada Day fireworks display in Orléans? c. Would the private market result in a fireworks display? d. Could governments provide a solution to achieving the efficient level of production?arrow_forwardWhat are the two characteristics of public goods? What is the free-rider problem as it related to public goods? Is U.S. border patrol a public good or a private good? Explain.arrow_forwardWhich of the following represents the true economic cost of production when firms produce goods that cause negative externalities? A. the social cost of production. B. the private cost of production. C. the external cost of production. D. the explicit cost of production.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Microeconomics (MindTap Course List)EconomicsISBN:9781305971493Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of MicroeconomicsEconomicsISBN:9781305156050Author:N. Gregory MankiwPublisher:Cengage Learning
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Microeconomics
Economics
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning