Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Chapter 14, Problem 11SQP
To determine
Market where the Coase theorem is applied.
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Bicycle paths are public goods that can be supplied at cost C = 10Q + Q2 where Q measures kilometers of bicycle paths. There are only two people in this city Mr. A and Ms. B. Describe the free-rider problem associated with the supply of this good. Suppose that demand is given by QA = 50 ‒ 0.5P and QB = 25 ‒ P. Find the efficient quantity of paths. Provide a fully labeled demand curve diagram. Calculate the cost of supplying the efficient quantity and suggest how this cost might be recovered from the two consumers
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?
A power plant releases an unpleasant odor into the local environment. This market is perfectly competitive, and the plant does not consider the damages imposed on local citizens in terms of lower air quality. The market can be characterized by the following equations:
MPB = 800 - 0.5Q
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MEC = 0.4 Q
a) Find the competitive equilibrium price and quantity, Qc and Pc.
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c) Provide a geographical depiction of the competitive and socially optimal solutions. Make sure you label the graph focusing on the following items: units of each axis, labels of curves (MPC, MPB, MSB, MSC), competitive equilibrium price and quantity, and socially optimal price and quantity.
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Chapter 14 Solutions
Economics For Today
Ch. 14.2 - Prob. 1.1GECh. 14.2 - Prob. 1.2GECh. 14.2 - Prob. 1.3GECh. 14.2 - Prob. 2.1GECh. 14.2 - Prob. 2.2GECh. 14.2 - Prob. 2.3GECh. 14.2 - Prob. 2.4GECh. 14 - Prob. 1SQPCh. 14 - Prob. 2SQPCh. 14 - Prob. 3SQP
Ch. 14 - Prob. 4SQPCh. 14 - Prob. 5SQPCh. 14 - Prob. 6SQPCh. 14 - Prob. 7SQPCh. 14 - Prob. 8SQPCh. 14 - Prob. 9SQPCh. 14 - Prob. 10SQPCh. 14 - Prob. 11SQPCh. 14 - Prob. 12SQPCh. 14 - Prob. 13SQPCh. 14 - Prob. 14SQPCh. 14 - Prob. 15SQPCh. 14 - Prob. 16SQPCh. 14 - Prob. 1SQCh. 14 - Prob. 2SQCh. 14 - From an economic viewpoint, the optimal amount of...Ch. 14 - Prob. 4SQCh. 14 - Prob. 5SQCh. 14 - Prob. 6SQCh. 14 - Prob. 7SQCh. 14 - Prob. 8SQCh. 14 - Prob. 9SQCh. 14 - Prob. 10SQCh. 14 - Prob. 11SQCh. 14 - Prob. 12SQCh. 14 - Prob. 13SQCh. 14 - Prob. 14SQCh. 14 - Prob. 15SQCh. 14 - Prob. 16SQCh. 14 - Prob. 17SQCh. 14 - Prob. 18SQCh. 14 - Prob. 19SQCh. 14 - Prob. 20SQ
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