Survey of Economics (MindTap Course List)
9th Edition
ISBN: 9781305260948
Author: Irvin B. Tucker
Publisher: Cengage Learning
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Chapter 4, Problem 8SQP
To determine
The impact of external cost and external benefits on resource allocation.
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Provide two examples of each of the following:
• Positive Production Externalities
• Negative Production ExternalitieS
• Positive Consumption Externalities
• Negative Consumption Externalities
Chicken production generally results in terrible odours that are carried by the wind to rural communities. This is an example of a ______________, with a result of ____________ of resources in chicken production.a. Negative externality, under-allocationb. Positive externality, over-allocationc. Positive externality, over-allocationd. Negative externality, , over-allocationFor each of the alternatives, explain which one is correct and also explain which ones are false or uncertain.
What are (environmental) externalities? Explain one example from production/consumption condition that would result in negative externalities
Chapter 4 Solutions
Survey of Economics (MindTap Course List)
Ch. 4.3 - Prob. 1YTECh. 4.3 - Prob. 2YTECh. 4 - Prob. 1SQPCh. 4 - Prob. 2SQPCh. 4 - Prob. 3SQPCh. 4 - Prob. 4SQPCh. 4 - Prob. 5SQPCh. 4 - Prob. 6SQPCh. 4 - Prob. 7SQPCh. 4 - Prob. 8SQP
Ch. 4 - Prob. 9SQPCh. 4 - Prob. 10SQPCh. 4 - Prob. 1SQCh. 4 - Prob. 2SQCh. 4 - Prob. 3SQCh. 4 - Prob. 4SQCh. 4 - Prob. 5SQCh. 4 - Prob. 6SQCh. 4 - Prob. 7SQCh. 4 - Prob. 8SQCh. 4 - Prob. 9SQCh. 4 - Prob. 10SQCh. 4 - Prob. 11SQCh. 4 - Prob. 12SQCh. 4 - Prob. 13SQCh. 4 - Prob. 14SQCh. 4 - Prob. 15SQCh. 4 - Prob. 18SQCh. 4 - Prob. 19SQ
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- Define negative and positive externalities and analyze their effect on resource allocationsarrow_forwardExamine the use of different allocation methods. Describe three different methods of allocating scarce resources. Explain how these allocation methods may affect quantity demanded, equilibrium price, and quantity supplied. Are these allocation methods more or less efficient than other methods? Explain your arguments using relevant course material and personal experience.arrow_forwardWeel explained answer needed no Ai The Coase Theorem states that: a) As long as property rights are well defined and no transaction costs exist, an efficient allocation will result b)As long as property rights are well defined and transaction costs are high, an efficient allocation will result. c)An efficient allocation will be equitable to all parties concerned. d)Property rights should initially be assigned to those affected by a negative externality.arrow_forward
- Discuss whether the imposition of maximum prices can improve the allocation of scarce resources. Give reasons why and why not.arrow_forwardShow and explain how the distribution/allocation constraints are satisfied by any point in an Edgeworth-box diagram.arrow_forwardIs point E Pareto efficient allocation? Explain your answer.arrow_forward
- Illegal fishing activities are an indication of inefficient resource allocation. Do you agree with this statement? Explain your answer.arrow_forwardGiven a MC function and a MB funtion for a good (e.g., MC = 10 + Q, MB = 5 - Q ,how do we derive an efficient allocation for the good? What if we add a per-unit externality (e.g., set to some constant =5 per unit emissions from production)?arrow_forwardExplain which of the following cases are classified as (A, B, C, or D) : (A) Negative Externality of Production or (B) Negative Externality of Consumption or (C) Positive Externality of Production or (D) Positive Externality of Consumption: The corporate development of some free software to benefit students A software company that creates social media programsarrow_forward
- Suppose the government is considering an increase in the toll on a certain stretch of highway from $.20 to $.40. At present, 80,000 cars per week use that highway stretch; after the toll is imposed, it is projected that only 75,000 cars per week will use the highway stretch. Assuming that the marginal cost of highway use is constant (i.e., the supply schedule is horizontal) and equal to $.20 per car, what is the change in social surplus attributable to the increase in the toll? (Hint: The toll increase will cause the supply schedule, not the demand schedule, to shift.) Calculate government revenues from the increased toll. A. $18,750 B. $37,500 C. $15,000 D. $1000arrow_forwardExplain which of the following cases are classified as (A, B, C, or D) : (A) Negative Externality of Production or (B) Negative Externality of Consumption or (C) Positive Externality of Production or (D) Positive Externality of Consumption: Almawassi village does not have a public fire department, some homeowners purchased private fire protection services to provide a positive externality to neighboring properties, which are less at risk of the protected neighbor's fire spreading to their (unprotected) house. Wakefulness due to a neighbor listening to loud music late at night. a person smoked heavily in a public place. A farmer who uses pesticides to produce vegetables A person planted ornamental trees along Salahiddeen street Creative laboratories which try to find vaccine for COVID 19 The corporate development of some free software to benefit students A software company that creates social media programs No. 2 3 4 5 6 7 8 Answerarrow_forwardRising prices for a natural resource stimulatea. the development of complements for the resource.b. the development of substitutes for the resource.c. the development of externalities from the resource.d. All of the above are correct.arrow_forward
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