Microeconomics: Principles Problems & Policies (McGraw-Hill Series in Economics)
20th Edition
ISBN: 9780077660727
Author: McConnell
Publisher: MCG
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Chapter 4, Problem 6RQ
To determine
Positive and negative externalities.
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Suppose that there are three beachfront parcels of land available for sale in Asilomar and six people who would each like to purchase one parcel. Assume that the parcels are essentially identical and that the minimum selling price of each is $445,000. The following table states each person's willingness and ability to purchase a parcel.
Person
Willingness and Ability to Purchase
(Dollars)
Ana
510,000
Charles
470,000
Dina
420,000
Gilberto
390,000
Juanita
380,000
Yakov
600,000
Which of these people will buy one of the three beachfront parcels? Check all that apply.
A. Ana
B. Charles
C. Dina
D. Gilberto
E. Juanita
F. Yakov
Assume that the three beachfront parcels are sold to the people that you indicated in the previous section. Suppose that a few days after the last of those beachfront parcels is sold, another essentially identical beachfront parcel becomes available for sale at a minimum price of $432,500. This fourth…
6. Consider the allocation of surface water between two types of users. The marginal net benefits are MNB, (q) =12-q, for one type and MNB, (q₂)=6-q, for the other type, where g, and q denote the quantity of water used by each type in suitable units and MNB denotes marginal net benefits in dollars per unit.
a. Determine the aggregate marginal net benefit. b. Suppose there are q, 8 units of water available in a given year. Determine the efficient
allocation of water to the two types. c. Suppose there are q, 4 units of water available in a given year. Determine the efficient
allocation of water to the two types. d. Draw a clearly labeled graph illustrating the efficient allocation of water in parts b and c.
-Suppose the market-equilibrium quantity of good x is larger than the socially-optimal quantity of good x. Does the production of good x convey a positive externality or does it convey a negative externality?
Chapter 4 Solutions
Microeconomics: Principles Problems & Policies (McGraw-Hill Series in Economics)
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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