1) True-False-Uncertain. Respond to following statements as True, False, Uncertain and justify your claim. Answers that do not provide justification will receive zero points. According to the Coase Theorem, government intervention is needed to solve externalities. It always makes sense when a public good is financed by the government. If A is Pareto efficient and B is Pareto inefficient, A must be a Pareto improvement over B. According to Arrow’s impossibility theorem, a democratic society will always make consistent decisions.

1) True-False-Uncertain. Respond to following statements as True, False, Uncertain and justify your claim. Answers that do not provide justification will receive zero points. According to the Coase Theorem, government intervention is needed to solve externalities. It always makes sense when a public good is financed by the government. If A is Pareto efficient and B is Pareto inefficient, A must be a Pareto improvement over B. According to Arrow’s impossibility theorem, a democratic society will always make consistent decisions.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter19: Externalities And Public Goods

Section: Chapter Questions

Problem 19.8P

See similar textbooks

Similar questions

True-False-Uncertain. Respond to following statements as True, False, Uncertain and justify your claim. According to the Coase Theorem, government intervention is needed to solve externalities. It always makes sense when a public good is financed by the government. If A is Pareto efficient and B is Pareto inefficient, A must be a Pareto improvement over B. According to Arrow’s impossibility theorem, a democratic society will always make consistent decisions.
True-False-Uncertain. Respond to following statements as True, False, Uncertain and justify your claim. Answers that do not provide justification will receive zero points. a) According to the Coase Theorem, government intervention is needed to solve externalities. b) It always makes sense when a public good is financed by the government. c) If A is Pareto efficient and B is Pareto inefficient, A must be a Pareto improvement over B.
Show the market for cigarettes in equilibrium, assuming that there are no laws banning smoking in public. Label the equilibrium private market price and quantity as Pm and Qm. Add whatever is needed to the model to show the impact of the negative externality from second-hand smoking. (Hint: In this case it is the consumers, not the sellers, who are creating the negative externality.) Label the social optimal output and price as Pe and Qe. On the graph, shade in the deadweight loss at the market output.
The government wants to address the pollution associated with the production of a good by introducing a tax on negative externality. The government is unsure about the magnitude of the negative externality (social cost of pollution) and hence it is considering two options: a high tax and a low tax option. Which statement(s) is/are true? Mark all that applies. Group of answer choices The government’s tax revenue will be higher under the high tax option. The government’s tax revenue may not be higher under the high tax options. The consumption level of the good may be lower under the high tax option. Regardless of whether the high tax or the low tax option is introduced, the cost of the tax is still lower than the social cost of pollution. Both high tax and low tax options are cost-effective in achieving a given level of pollution reduction as long as the same tax applies to all polluting sources. Only the high tax option is cost-effective.
Indicate whether the statement is true or false, and justify your answer.Suppose Fred imposes negative externalities on Wilma when he engages in some otherwise productive activity (like yelling “Yabba Dabba Doo!” to encourage himself, for instance). Suppose further that Fred and Wilma know each other well, communicate effectively and trust each other, and generally have low costs from transacting with each other. In this setting, having the government impose a Pigouvian tax on Fred each time he yells “Yabba Dabba Doo!” is the only way to generate socially optimal levels of yelling.
Suppose a positive externality is associated with college enrollment. Assume that college instruction is sold in a competitive market and that the marginal social cost of providing it increases with enrollment. Show how a corrective subsidy to college students will increase the market price of instruction. Show the net gain in well-being possible from the subsidy and the amount of tax revenue required to finance its costs on your graph. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Assume that Matt, Joe, and Teresa are the only citizens in a community. A proposed public good has a total cost of $1,000. All three citizens will share an equal portion of this cost in taxes. The benefit of the public good is $380 for Matt, $360 for Joe, and $200 for Teresa. In a majority vote, this proposal will most likely be Multiple Choice accepted; the public good is produced, even though it is economically inefficient. defeated; the public good is not produced, which is the proper outcome. defeated; the public good is not produced, even though it would have been efficient to do so. accepted; the public good is produced, which is economically efficient.
Illustrate the efficient provision of a public good regarding partial equilibrium analysis.
Indicate whether the statement is true or false, and justify your answer.In the presence of externalities, private and social welfare diverge.
5) Smoking increases health care costs. Is this an externality? Which of the following statements make sense? A) Not if people pay for their health care themselves. B) Not if their insurance premiums are actuarially adjusted for all the potential health care costs C) Not if smokers bear all the cost of lower productivity, including earlier death. D) Not if smoking is not allowed in public areas. E) Not if secondhand smoking is eliminated by technology (such as electronic cigarettes) F) Not if smokers are required to pay a heavy tax that is equal to its damage.
Can you answer with explanation and show formula. The accompanying table relating to a public good provides information on the prices Young and Zorn are willing to pay for various quantities of that public good. These two people are the only members of society. Determine the price that society is willing to pay for the public good at each quantity of output. If the government’s marginal cost of providing this public good is constant at $7, how many units of the public good should government provide?
Assume there are two individuals stranded on a deserted island. One of the individuals chooses to spend the day shouting for help. The other chooses to light large fires to produce lots of smoke. The smoke from the fires suffocates the shouting islander, inhibiting their ability to shout. The externality in this case is both the smoke from the fires and the lungs of the shouting individual. True or False?