MICROECONOMICS(LL)COMPANION
21st Edition
ISBN: 9781260713541
Author: McConnell
Publisher: MCG
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Question
Chapter 4, Problem 7DQ
To determine
The positive externality and subsidy.
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Students have asked these similar questions
Question 22
Let Q be quantity of beer (in packs) consumed in the US. Assume beer consumption imposes a negative externality of $30 per pack. The private demand for beer is P=150-2Q while the private supply curve is P=Q. If the government impose a $30 tax per pack
what is the change in total surplus from before to after the imposition of the tax.
-$150
beer,
$150
O $1.350
o 51,350
Refer to the above supply and demand graph of Product X.
Q,
Quantity of Product X
What would happen if the government taxed the producers of this product because
it has negative externalities in production?
O 1) Supply would increase.
2) Demand would decrease.
O 3) Price would decrease.
4) Supply would decrease.
Price
The accompanying diagram shows the supply and demand diagrams
for the competitive market for honey in one region. MC represents
private marginal cost and MB represents private marginal benefit.
Assume there are two types of firms in this region-beekeepers that
produce honey and orchard keepers that produce peaches. The bees
provide a benefit to the orchard keepers by pollinating their peach
trees.
If the external marginal benefit is $2 per unit of honey, then what is the
allocatively efficient output?
O A. 20 kg
B. 80 kg
C. 40 kg
D. 100 kg
E. 60 kg
C
Price ($ per kg)
12
11
10
8
20
MC2
MB
40 :60 :80
S=MCO
MC₁
MB₂
D=MBO
100
Quantity (kg of honey per month)
Chapter 4 Solutions
MICROECONOMICS(LL)COMPANION
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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