Taxing for Annoying people.

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Answer 1

Question

Chapter 5, Problem 5.3.7PA

Sub part (a):

To determine

Taxing for Annoying people.

Sub part (b):

To determine

Impact of planting flowers.

Sub part (c):

To determine

Impact of taxing negative externalities.

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In the past, some counties and countries have imposed taxes on sugar, saturated fats, and food made with those ingredients as a way to reduce consumption of those foods. Assume the government imposes a unit tax on all chocolate. Answer the following questions Is there an externality from consuming chocolate? Explain why or why not. Use a correctly labeled graph to show what happens in the market for chocolate as a result of the unit tax. On your graph, show the market equilibrium before and after the tax (i.e. show the equilibrium prices and quantities.) Show graphically what happens to consumer surplus and producer surplus after the tax (you may need a separate graph to show this.) Will consumers be able to shift this tax to sellers? If yes explain why/how. If no explain why not. Based on your answer to c, who will bear the incidence of this tax? Show this on a graph. How will consumers respond to the tax on chocolate? How will candy companies respond strategically to the tax on…

Explain the difference between a positive externality and a negative externality. Can both types of externalities result in market failure? Why or why not?

Briefly explain what is meant by the term "externality" and how it occurs. What are some ways (name at least 2) in which a negative externality can be corrected?

Answer 2

Question

Chapter 5, Problem 5.3.7PA

Sub part (a):

To determine

Taxing for Annoying people.

Sub part (b):

To determine

Impact of planting flowers.

Sub part (c):

To determine

Impact of taxing negative externalities.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 5, Problem 5.3.7PA

Sub part (a):

To determine

Taxing for Annoying people.

Sub part (b):

To determine

Impact of planting flowers.

Sub part (c):

To determine

Impact of taxing negative externalities.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 5, Problem 5.3.7PA

Sub part (a):

To determine

Taxing for Annoying people.

Sub part (b):

To determine

Impact of planting flowers.

Sub part (c):

To determine

Impact of taxing negative externalities.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 5, Problem 5.3.7PA

Sub part (a):

To determine

Taxing for Annoying people.

Sub part (b):

To determine

Impact of planting flowers.

Sub part (c):

To determine

Impact of taxing negative externalities.

Answer 6

Chapter 5, Problem 5.3.7PA

Sub part (a):

To determine

Taxing for Annoying people.

Answer 7

Chapter 5, Problem 5.3.7PA

Sub part (a):

To determine

Taxing for Annoying people.

Answer 8

Sub part (b):

To determine

Impact of planting flowers.

Answer 9

Sub part (b):

To determine

Impact of planting flowers.

Answer 10

Sub part (c):

To determine

Impact of taxing negative externalities.

Answer 11

Sub part (c):

To determine

Impact of taxing negative externalities.

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

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Answer 15

Ch. 5 - Prob. 5.1.1RQ Ch. 5 - Prob. 5.1.2RQ Ch. 5 - Prob. 5.1.3RQ Ch. 5 - Prob. 5.1.4RQ Ch. 5 - Prob. 5.1.5RQ Ch. 5 - Prob. 5.1.6PA Ch. 5 - Prob. 5.1.7PA Ch. 5 - Prob. 5.1.8PA Ch. 5 - Prob. 5.1.9PA Ch. 5 - In a study at a large state university, students...

Taxing for Annoying people.

Solution Summary: The author explains that the Pigovian tax is used to bring the efficient level of output in the economy when there is the presence of externalities.

Concept explainers

Taxing for Annoying people.

Impact of planting flowers.

Impact of taxing negative externalities.

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Chapter 5 Solutions