EBK MICROECONOMICS
2nd Edition
ISBN: 8220103679701
Author: List
Publisher: YUZU
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Question
Chapter 9, Problem 3P
(a)
To determine
Whether Person J should be allowed to play opera music or not.
(b)
To determine
The agreement both J and S will reach on creating noise, if there are no certain rules in the apartment about noise from music.
(c)
To determine
The agreement both J and S will reach on creating noise if there are certain rules in the apartment about people will not play music if neighbor objects.
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Students have asked these similar questions
Viral infections such as flu are highly contagious. The number of infections and thus the spread of the disease can be prevented by getting vaccinated. However, the decision to take vaccine is voluntary and some people choose not to go for it for various reasons.]
[What type of externality occurs by getting vaccinated against contagious diseases? Explain your answer in 100 words or less.
[In a diagram, show the market equilibrium quantity of the vaccine. Is the quantity also socially efficient? Explain in 100 words or less and demonstrate using the same diagram.
[Suggest one method to achieve a socially efficient outcome. Explain your answer in 100 or less words.
Markets do not handle externalities well. With a ____________________ externality, the market produces too much of a good; whereas with a ________________________ externality, the market produces too little of a good. In both cases, if the market creates ________________ _______________, meaning the market is not efficient because it is not fully capturing the ____________ __________ of positive externalities nor the __________________ ___________ of negative externalities.
The Coase theorem states that
if transactions costs are low, property rights are assigned, and parties understand how much they value something, private bargaining will result in an efficient solution to the problem of externalities.
government intervention is always needed if externalities are present.
a free market equilibrium is the best solution to address externalities.
assigning property rights is the only thing the government should do in a market economy.
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