Pearson eText Economics -- Instant Access (Pearson+)
13th Edition
ISBN: 9780136879459
Author: Michael Parkin
Publisher: PEARSON+
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Chapter 17, Problem 23APA
To determine
Quota and market value of water.
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Graph the following data on social and market demand: Im pretty sure I have the graph correct but I am unsure how to find the anwsers to the questions.
Price ($)
20
18
16
14
12
10
Market quantity demanded (units per month)
10
20
30
40
50
60
Social quantity demanded (units per month)
20
30
40
50
60
70
Does this product have external benefits or external costs?
How large ($) is that externality
Refer 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.
32
28
Social Cost
24
20
Private Cost
16
12
8
Demand
4
100
200
300
400
500
a. How many units of good are produced at the market equilibrium3
b. How much is the external cot for each unit of good produced?
c. How many units of good should be produced at the social optimum?
d. In order to reach the social optimum, what should the government do?
Chapter 17 Solutions
Pearson eText Economics -- Instant Access (Pearson+)
Ch. 17.1 - Prob. 1RQCh. 17.1 - Prob. 2RQCh. 17.2 - Prob. 1RQCh. 17.2 - Prob. 2RQCh. 17.2 - Prob. 3RQCh. 17.2 - Prob. 4RQCh. 17.3 - Prob. 1RQCh. 17.3 - Prob. 2RQCh. 17.3 - Prob. 3RQCh. 17.4 - Prob. 1RQ
Ch. 17.4 - Prob. 2RQCh. 17.4 - Prob. 3RQCh. 17.4 - Prob. 4RQCh. 17 - Prob. 1SPACh. 17 - Prob. 2SPACh. 17 - Prob. 3SPACh. 17 - Prob. 4SPACh. 17 - Prob. 5SPACh. 17 - Prob. 6SPACh. 17 - Prob. 7SPACh. 17 - Prob. 8SPACh. 17 - Prob. 9SPACh. 17 - Prob. 10APACh. 17 - Prob. 11APACh. 17 - Prob. 12APACh. 17 - Prob. 13APACh. 17 - Prob. 14APACh. 17 - Prob. 15APACh. 17 - Prob. 16APACh. 17 - Prob. 17APACh. 17 - Prob. 18APACh. 17 - Prob. 19APACh. 17 - Prob. 20APACh. 17 - Prob. 21APACh. 17 - Prob. 22APACh. 17 - Prob. 23APACh. 17 - Prob. 24APACh. 17 - Prob. 25APACh. 17 - Prob. 26APACh. 17 - Prob. 27APACh. 17 - Prob. 28APACh. 17 - Prob. 29APACh. 17 - Prob. 30APA
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- The diagram below represents the market for education. Assume that education provides several external benefits. a. Using the diagram, show the social demand curve for this market. Instructions: Use the tool provided 'Social value' to plot this line on the graph. Plot only the endpoints of the line. Tools Supply Private Social value Demand Private Pricearrow_forwardIn economic term, COVID-19 vaccinations provide A. negative externality B. positive externality C. sunk costs D. wastearrow_forwarda. Place point A at the equilibirum outcome. Place point B at the socially efficient outcome. Market for house-painting services 2,400 2,200 2,000 -Supply 1,800 1,600 400 9,200 -Marginal social benefit 4,000 `Marginal private benefit 800 600 400 A 200 20 40 60 80 100 120 140 160 180 200 220 240 Quantity of houses painted (thousands) b. The graph implies that house-painting services produce externalities.arrow_forward
- ASAP plz Why don't people/stores make different decisions? Cost is a factor: a case of foam take-out containers costs $25, compared with $58 for paper and recyclable-plastics. How does this affect the firm's profit? Are consumers willing to pay more? Negative externality Consider the demand and supply given above. Suppose there is an external cost given by MEC=5Q. Find social equilibrium price and quantity. Draw a graph and label both private and social equilibrium.arrow_forwardRefer to Figure. The graph represents a market in which 24 22 22 Price 18 16 81 Social cost (private cost and external cost) Supply (private cost) Demand (private valne) 120 160 Quantity a. Othere is no externality. b. Othere is a positive externality. c. Othere is a negative externality. d. The answer cannot be determined from inspection of the graph.arrow_forwardIn the Land of Purity, there is only one form of pollution, called gunk. Table 12.14 shows possible combinations of economic output and reduction of gunk, depending on what kinds of environmental regulations you choose. Sketch a graph of a production possibility frontier with environmental quality on the horizontal axis, measured by the percentage reduction of gunk, and with the quantity of economic output on the vertical axis. Which choices display productive efficiency? How can you tell? Which choices show allocative efficiency? How can you tell? In the choice between K and L, can you say which one is better and why? In the choice between K. and N, can you say which one is better, and why? If you had to guess, which choice would you think is move likely to represent a command-and-control environmental policy and which choice is more likely to represent a market-oriented environmental policy, choice L or M? Why?arrow_forward
- From an economic perspective, is it sound policy to pursue a goal of zero pollution? Why or why not?arrow_forwardFour films called Elm, Maple, Oak, and (Shelly, produce wooden chairs. However, they also produce a great deal of garbage (a mixture of glue, varnish, sandpaper, and wood scraps). The first row of Table 12.6 shows the total amount of garbage (in tons) that each film currently produces. The other rows of the table show the cost of reducing garbage produced by the first five tons, the second five tons, and so on. First, calculate the cost of requiring each firm to reduce the weight of its garbage by one-fourth. Now, imagine that the government issues marketable permits for the current level of garbage, but the permits will shrink the weight of allowable garbage for each film by one-fourth. What will be the result of this alternative approach to reducing pollution?arrow_forwardc. Determine the equilibrium price and quantity in this market. equilibrium price: $ d. Determine the socially efficient price and quantity in this market. socially efficient price: $ equilibrium quantity: e. The market produces socially efficient quantity: thousand houses thousand houses painted houses relative to the socially efficient outcome.arrow_forward
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