Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Question
Chapter 14, Problem 18SQ
To determine
The impact of equal social marginal cost and benefit.
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SCENARIO: Developers of a new housing scheme spend money putting in roads, lighting and clearing land surrounding the scheme.
(1) The type of market failure represented by the scenario is a/an
a. negative externality
b. positive externality
c. public good
d. asymmetric information
(2) The market fails in this scenario because
a. no market transaction takes place
b. goods are underproduced
c. goods are overproduced
d. no private provision
(3) Solution to the market failure is
a. subsidy
b. government provision
c. taxation
d. screening
e. signaling
(4) The equilibrium quantity is _______the socially efficient quantity.
a. greater than
b. less than
c. equal to
(5) The private benefit curve is
a. shifts outwards to the social benefit curve
b.shifts inwards to the social benefit curve
c. remains unchanged
(6) The private cost curve is
a. shifts outwards to the social cost curve
b.shifts inwards to the social cost curve
c. remains unchanged
(7) The Efficient output is found where the → the…
Which of the following does the producer receive if the market price exceeds the cost of production?
Question 2 options:
a)
Producer surplus
b)
Deadweight loss
c)
External benefit
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
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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- On the attached graph: 1. Illustrate the marginal social benefit curve 2. Illustrate the area of deadweight loss 3. Identify the market Q and the socially optimal Qarrow_forward1. Describe an incentive your parents offered to you in an effort to influence your behavior. 2. Give an ideal example of a positive (consumption) externality which leads to a market failure. 3.Differentiate equality from equity. 4. Which one is better? Equality or Equity? Give an example in which the government has done such a thing.arrow_forwardusing a diagram Explain the socially optimal quantity of a public goodarrow_forward
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