Pearson eText Economics -- Instant Access (Pearson+)
13th Edition
ISBN: 9780136879459
Author: Michael Parkin
Publisher: PEARSON+
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Question
Chapter 16, Problem 6SPA
To determine
The provision level of public good by bureaucrats.
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Suppose that a vaccine is developed for a highly contagious strain of flu. The likelihood that anyone will get this flu decreases as more people receive
the vaccine. One of the demand curves below represents the private demand for the vaccine and the other represents the social demand for the
vaccine.
Price (5/dose)
110T
100
90
80
70
60
50
40
30
20
10
0
0 25 50 75 100 125 150 175 200 225 250
Quantity (doses/day)
The total social benefit of 75 doses is:
D1
02
Price
Ssocial
Sinternal
$7.00
$6.00
$5.00
D
$4.00
Dinternal
3,000
3,500
Quantity
externality.
In the market shown in the diagram above, there is a
Select one:
a. negative production
b. negative consumption
c. positive production
d. positive consumption
This graph shows the market for
antifreeze. Use it to answer the next
questions.
8
6.
1
100 200 300 400
500
600 700 800 900 1000 1100
Quantity
Question 8
The production of antifreeze creates
pollution. The pollution imposes a
cost of $2 per gallon on society.
What is the marginal social cost of
the 500th gallon of antifreeze?
Answer is a whole number; do not
include a dollar sign (e.g. 10).
Chapter 16 Solutions
Pearson eText Economics -- Instant Access (Pearson+)
Ch. 16.1 - Prob. 1RQCh. 16.1 - Prob. 2RQCh. 16.1 - Prob. 3RQCh. 16.1 - Prob. 4RQCh. 16.2 - Prob. 1RQCh. 16.2 - Prob. 2RQCh. 16.2 - Prob. 3RQCh. 16.2 - Prob. 4RQCh. 16.3 - Prob. 1RQCh. 16.3 - Prob. 2RQ
Ch. 16.3 - Prob. 3RQCh. 16.3 - Prob. 4RQCh. 16.3 - Prob. 5RQCh. 16 - Prob. 1SPACh. 16 - Prob. 2SPACh. 16 - Prob. 3SPACh. 16 - Prob. 4SPACh. 16 - Prob. 5SPACh. 16 - Prob. 6SPACh. 16 - Prob. 7SPACh. 16 - Prob. 8SPACh. 16 - Prob. 9SPACh. 16 - The Economics of Healthcare (Study plan 16.3) Use...Ch. 16 - Prob. 11APACh. 16 - Prob. 12APACh. 16 - Prob. 13APACh. 16 - Prob. 14APACh. 16 - Prob. 15APACh. 16 - Prob. 16APACh. 16 - Prob. 17APACh. 16 - Prob. 18APACh. 16 - Prob. 19APACh. 16 - Prob. 20APACh. 16 - Prob. 21APACh. 16 - Prob. 22APACh. 16 - Prob. 23APACh. 16 - Prob. 24APA
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Similar questions
- draw a graph of a product without any externalityarrow_forwardUse the table below to answer the questions: Quantity Supplied (Private Supplied (Social Cost only) 12,000 14,000 17,000 20,000 24,000 Quantity Quantity Demanded Price 19,000 14,000 9000 5000 1000 $50 $55 $60 $65 $70 Cost) 6000 7500 9000 11,000 14,000 (a) Find the equilibrium price, assuming sellers ignore negative externalities. (b) Find the equilibrium quantity, assuming sellers ignore negative externalities. (c) Find the optimal price, including external costs. (d) Find the optimal quantity, including external costs.arrow_forwardRefer to the Figure. This graph represents the market for cigarettes. This market Price 34 32 30 28 26 24 Social Cost 22 20 Private Cost 18 16 14 12 10 8 4 2 Demand 200 500 600 Quantity has no externalities. would benefit from a tax. would benefit from a subsidy. has no need for government intervention.arrow_forward
- When externalities cause markets to be inefficient (x) government action is sometimes needed to solve the problem. (y) private solutions can be developed to solve the problem. (z) there is a way to eliminate the problem of externalities in the market if producers are provided with the appropriate incentives to internalize the externality. Select one or more: a. (x), (y) and (z) b. (x) and (y) only c. (x) and (z) only d. (y) and (z) only e. (z) onlyarrow_forwardWhat are externalities; and how the government can fix itarrow_forwardSuppose the government like to set a fishing license fee per trip to regulate the fishery. What is the MAXIMUM amount the government can charge and still achieve the SOCIALLY EFFICIENT optimal number of trips? (Round answer to nearest dollar)arrow_forward
- How market equilibrium is found with Pollution Abatement Subsidy? Also draw graph and interpret it.arrow_forwardThe following companies all manufacture widgets and dump tons of glop into the air. Manufacturer Cost to clean up 1 ton of glop Current contribution to overall pollution (tons of glop) 200 Polluters-R-Us Smog Brothers, Inc. Really Dirty Industries 0 $ 70 100 30 The government wants to halve total pollution but does not know how much it will cost each company. the government employs a tradable permit scheme in which it gives the same number of permits to each manufacturer at no cost, the total cost of cleanup for Smog Brothers, Inc., after the exchange of permits, is $ 7,000 6,000 13,000 200 200arrow_forwardMacmillan Learning The accompanying schedule depicts the marginal social cost (MSC) and the marginal social benefit (MSB) associated with pollution emissions. Assume the polluters bear none of the social cost of pollution and all of the benefits. Quantity is measured in tons. Social Cost- Benefit Schedule Q MSB MSC What is the socially optimal amount of pollution? 9 tons 7 tons 8 tons 0 tons What is the size of the tax that would move the market to this socially optimal quantity? What is the size of the tax that would move the market to this socially optimal quantity? $135 per ton $105 per ton $120 per ton $150 per ton 4 180 60 09 5 165 75 75 6 150 90 00 7 135 105 8 120 120 9 105 135 10 90 150 = 11 75 165 12 60 00 180 13 45 195 14 30 210 15 15 225 16 0 240arrow_forward
- This graph represents the tobacco industry. IPrice 16 14 Social Cost 12 10 Private Cost 8 6 4 Demand 200 500 650 Quantity a) Without any government intervention, what is the market determined price and quantity? b) What is the price of the externality? c) What is the socially optimal price and quantity? d) What should the government do (impose a tax or provide a subsidy) to internalize this externality? What is the amount of the the corrective tax/subsidy needed to be to move the outcome from the market equilibrium to the socially-optimal outcome?arrow_forwardDraw a graph of water pollution as a negative externality and explain itarrow_forwardDefine pollution charge and will our economy be able to control pollution? Share your thoughts in a paragraph.arrow_forward
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