PRICE (Dollars per unit) 36 30 24 18 6 A II, III I, III II, III, IV C B Social Cost Supply Demand 100 200 300 400 500 600 QUANTITY (Units of plastic) Considering the graph above, judge the following statements: I. The private solution for this market is given by point "B" II. The socially optimal quantity for this market is Q = 250 units III. To reach the social optimum, the government could tax plastic production in $9 per unit. IV. The external cost generated by any one unit of plastic produced equals $12. Which of the following includes only the true statements?
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- Suppose a city releases 16 million gallons of raw sewage into a nearby lake. Table 12.8 shows the total costs of cleaning up the sewage to different levels, together with the total benefits of doing so. (Benefits include environmental, recreational, health, and industrial benefits.) Using the information in Table 12.8, calculate the marginal costs and marginal benefits of reducing sewage emissions for this city. See Production, Costs and Industry Structure if you need a refresher on how to calculate marginal costs. What is the optimal level of sewage for this city? Why not just pass a law that films can emit zero sewage? After all, the total benefits of zero emissions exceed the total costs.PRICE (Dollars per ton) 80 72 64 56 48 40 32 24 16 B Demand 0 25 50 75 100 125 150 175 200 225 250 QUANTITY (Millions of tons) Graph Input Tool Daily Demand for Pollution Rights Price 8 (Dollars per ton) Quantity Demanded (Millions of tons) 225 Suppose the government has determined that the socially optimal quantity of sulfur dioxide emissions is 125 million tons per day. One way governments can charge firms for pollution rights is by imposing a per-unit tax on emissions. A tax (or price in this case) of $ of sulfur dioxide emitted will achieve the desired level of pollution. per ton Now suppose the U.S. government does not know the demand curve for pollution and, therefore, cannot determine the optimal tax to achieve the desired level of pollution. Instead, it auctions off pollution permits. Each permit entitles its owner to emit one ton of sulfur dioxide per day. To achieve the socially optimal quantity of pollution, the government auctions off 125 million pollution permits. Given…1. Solve for the graph and aggregate demand of the city’s 30 residents as functions of the number of trees. Label intercepts slopes and intersection of two sections. 2. Assume that the city can obtain each tree at a constant marginal cost of 200. Solve the socially efficient numbers of trees for the city to purchase.
- Cost and benefit (thousands of dollars per concert) MSC 100 80 60 40 20 0 5 A) 0. B) 5. (C) 10. D) 20. E) 15. 15 MC MB 10 20 25 Quantity (concerts per year) 39) The figure above illustrates the marginal private cost and the marginal social cost to the city of Halifax for each rock concert that is offered. It also illustrates the marginal private benefit. There is no external benefit. The efficient number of concerts in Halifax isPrice, Cost 998760 2009 201 10 1 2 3 Private Cost Social Cost Demand 6 7 8 9 10 4 5 Quantity (a) Give a definition of a negative externality and explain how it arises in a market. D (b) Refer to the graph above. If the government does not intervene in this market, what is the free market equilibrium? Is it socially efficient? Explain (c) What kind of government intervention is required in this case? Explain how it will change the market outcomEcon Return to Activity Score Mentor Mega Beans Market Booming Berries Booming Berries Materials Mark, if the external marginal cost from Booming Berries is $20 per thousand pounds, what is the socially efficient price per pound? 130 Booming Berrles 120 Clare 110 100 $70 90 80 70 Mark 60 That is correct! 50 40 30 Econ 20 Mentor 10 Mark, if the external marginal cost from Booming Berries is $20 per thousand pounds, what is the socially efficient quantity (in thousands)? 10 20 30 40 50 60 70 80 90 100 110 120 Quantity (in thousands) Clare Enter a response then click Submit below (in thousands) Submit MacBook Air F12 FI1 F9 F10 F8 F7 F6 888 F4 F5 F3 F2 esc F1 * & 24 % 8 @ # 7 3 4 2 T E Q tab Price (per pound)
- This graph represents the tobacco industry. IPrice 16 14 Social Cost 12 10 Private Cost 8 6 4 Demand 200 500 650 Quantity a) Without any government intervention, what is the market determined price and quantity? b) What is the price of the externality? c) What is the socially optimal price and quantity? d) What should the government do (impose a tax or provide a subsidy) to internalize this externality? What is the amount of the the corrective tax/subsidy needed to be to move the outcome from the market equilibrium to the socially-optimal outcome?If a Pigouvian tax is used to reduce carbon emissions, it must be set to be equal to1. the private marginal cost of productionb 2.The cost of the catastrophic outcomes 3. the total private cost of production 4.The marginal social cost of carbon emissionsa. Place point A at the equilibirum outcome. Place point B at the socially efficient outcome. Market for cigarettes 10 Marginal social cost В Marginal private cost (supply) 8 A 7 Demand 4 3 1 30 60 90 120 150 180 210 240 Quantity of cigarettes (millions of packs) CO LO Price ($)
- 11 The demand for education in the market is given by D(p) = 100000 - p where D(p) is the number of degrees. (a) if the market is competitive where the cost to each provider of a degree is $10000, then what is the equilibrium number of degrees and equilibrium price? (b) suppose that there is external benefit of $10000 per degree. what is the efficient number of degrees? (c) draw a diagram with relevant marginal values and marginal costs showing the competitive outcome, the efficient outcome, and the lost surplus from a competitive market. label the relevant curves and the relevant outcomes.It is expected that any of 50 firms that specialize on producing mousetraps can invest 150 and develop a new kind of a mousetrap within six months. The expected present value of profit from the patent on this mousetrap is 1000. Assume that the delay of up to six months in developing the new mousetrap results in negligible social costs. (i) What is the socially efficient number of firms to undertake the development of the new mousetrap? (ii) How many firms would participate in the patent race to develop the new mousetrap? (iii) Assuming that the investments to develop the mousetrap are made at time 0 (before anybody develops the new mousetrap), what is the social loss from the patent race?Can I get help asap please The figure below shows the market for a chemical, of which the production causes certain negative externalities in the form of pollution. Define MCP = marginal private cost, MCS = marginal social cost, D = market demand, P = price, and Q = quantity.(a) If the market is competitive, what is the equilibrium price and quantity?(b) Is this equilibrium outcome socially optimal?(c) In terms of the areas denoted by A, B, and C, what is the deadweight loss to society if the market is competitive?(d) What can the government do to achieve the socially optimal level of pollution?