EBK ECONOMICS: PRINCIPLES AND POLICY
13th Edition
ISBN: 9781305465626
Author: Blinder
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 15, Problem 5TY
To determine
The amount willing to be spend for the legal battles.
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Note : Please (Only do part 3)
Part 1: Some Once-lers live in a wonderful land filled with beautiful truffula trees. They each independently chop down the truffula trees to make and sell thneeds. The total value of thneeds sold is f(x) = 150x − 5x2, where x is the number of truffula trees chopped down. If it costs 20 dollars to chop down a truffula tree, how many trees will the members of the Once-ler family collectively chop down?
a. 13
b. 28
c. 24
d. 15
e. 14
Part 2: (continued from previous question) The Lorax appears from a truffula stump and demands that the Once-lers act more responsibly. He demands that they chop down the socially optimal number of truffula trees. How many trees would be chopped down in the social optimum?
a. 13
b. 16
c. 15
d. 14
e. 12
Part 3: (Continued from above) Because the Once-lers are motivated by individual profit and won’t simply do what the Lorax says, he instead imposes a fine for every tree that the Once-lers chop down. How big must this fine be…
11
The Placebo Drug Company holds a patent on one of its discoveries.
Assuming that the production of the drug involves rising marginal cost, draw a diagram to illustrate Placebo’s profit-maximizing price and quantity. Also show Placebo’s profits. (10 points)
Now suppose that the government imposes a tax on each bottle of the drug produced. On a new diagram, illustrate Placebo’s new price and quantity. How does each compare to your answer in part (a)? (10 points)
Although it might not be easy to see in your diagrams, the tax reduces Placebo’s profit. Explain why this must be true. (5 points)
Instead of the tax per bottle, suppose that the government imposes a tax on Placebo of £110,000 regardless of how many bottles are produced. How does this tax affect Placebo’s price, quantity and profits? Explain. (Hint: Additional unit produced won’t affect the tax amount). (10 points)
Chapter 15 Solutions
EBK ECONOMICS: PRINCIPLES AND POLICY
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- help me with parts a,b,c,d and please explainarrow_forwardLegal Environment of Business Unit 2 Chapter 9: Discussion Poor countries assert that patented drugs are too expensive for most of their people to afford. The issue became especially noteworthy over drugs for AIDS sufferers in Africa. Monthly drug expenses are above average total income levels. Countries have been changing their drug laws to eliminate patent rights in certain cases. Do drug companies have an ethical duty to sell their products for the lowest possible price? Should countries abolish patent protection for drugs? I have to write a short paragraph with a Title. I am needing help with this short discussion assignment.arrow_forwardImagine that two firms in two different countries want to bring a new product to market. Due to economies of scale, if both firms do this, they will both lose £100 million. But if only one firm does this, it will gain £300 million. (a) What is the best strategy for the first firm, if the second firm has not yet entered the market, and why?arrow_forward
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- Identify an article from the Wall Street Journal within the last six weeks that relates to one of the following topics: (1) Factors in an organization's external environment that had an impact on the organization. (2) Factors in an organization's internal environment that had an impact on the organization. (3) An article that provides examples of an organization exploiting the resources of a competitor to strengthen its competitive advantage. First, Summarize the article Next, Discuss what you found interesting, educational, insightful, etc.? Then, Discuss how the article you found relates to the material you read for this week. Summarize your post. You should not type the questions, the discussion post should flow as one document. Think of my directions as writing prompts. Each paragraph needs at least 4-5 sentencesarrow_forwardQUESTION 21 A patent should cover a long enough period of time: For the cows to come home. For the inventor to earn a good return. For the fish to swim. Before taking the product away from society. For society to enjoy the costs of the product.arrow_forward22: What are some of the Factors Leading to Globalization? 23: What are the Characteristics of a Purely Competitive Market? 24: What are the Characteristics of a Monopolistic Competition Market?arrow_forward
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