MICROECONOMICS (CUSTOMIZED CHAPTERS + C
21st Edition
ISBN: 9781307215267
Author: McConnell
Publisher: MCG CUSTOM
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Question
Chapter 4, Problem 6DQ
To determine
The positive externalities.
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Students have asked these similar questions
LO 18.2]
3. The weekly supply and demand for packs of cigarettes in Carcinia is given in Figure 18P-1. [
a. Suppose cigarette smoking causes a $6/pack external cost on non-smokers. Draw the demand
curve that would exist if the externality associated with smoking were internalized by
consumers.
b. How many packs of cigarettes are consumed per week?
c. What is the efficient number of cigarette packs?
d. What would be the total gain in surplus if this externality could be internalized?
FIGURE 18P-1
Price ($)
CHECHENNAKKA208642
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32
30
18
16
14
12
10
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Packs of cigarettes (millions)
IN-CLASS
ACTIVITY 5
1.
Chapter 4
Market Failure Caused by Externalities
Page
94 Problem 1
Draw a supply and demand graph and
identify the areas of consumer surplus and
producer surplus. Given the demand curve,
how will an increase in supply affect the
amount of surplus shown in your diagram ?
Explain. LO4.1 (Differentiate between
demand-side market failures and supply-side
market failures.
Suppose the equation for the demand curve in a market is P=100 – 2Q. Also, suppose the equation for the supply curve in the same market is P=10+3Q. Suppose there is an external cost of $20 associated with the
production of each unit of the good. The socially optimal quantity is
O 4 units smaller than the market equilibrium quantity.
O 22 units greater than the market equilibrium quantity
O 14 units smaller than the market equilibrium quantity
O 4 units greater than the market equilibrium quantity.
Chapter 4 Solutions
MICROECONOMICS (CUSTOMIZED CHAPTERS + C
Ch. 4.A - Prob. 1ADQCh. 4.A - Prob. 2ADQCh. 4.A - Prob. 3ADQCh. 4.A - Prob. 1ARQCh. 4.A - Prob. 2ARQCh. 4.A - Prob. 3ARQCh. 4.A - Prob. 1APCh. 4 - Prob. 1DQCh. 4 - Prob. 2DQCh. 4 - Prob. 3DQ
Ch. 4 - Prob. 4DQCh. 4 - Prob. 5DQCh. 4 - Prob. 6DQCh. 4 - Prob. 7DQCh. 4 - Prob. 8DQCh. 4 - Prob. 9DQCh. 4 - Prob. 1RQCh. 4 - Prob. 2RQCh. 4 - Prob. 3RQCh. 4 - Prob. 4RQCh. 4 - Prob. 5RQCh. 4 - Prob. 6RQCh. 4 - Prob. 7RQCh. 4 - Prob. 1PCh. 4 - Prob. 2PCh. 4 - Prob. 3PCh. 4 - Prob. 4PCh. 4 - Prob. 5PCh. 4 - Prob. 6PCh. 4 - Prob. 7P
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