Price of Gardening ($) L M O P S U Q N MPB MC MSB Quantity of Gardening a) Using the letters on the diagram, describe the areas of (i) consumer surplus and (ii) producer surplus if the private market equilibrium occurs. b) Using the letters indicated on the diagram, describe the areas of (i) total social surplus and (ii) total externality if the socially optimal (Pareto efficient) level of gardening occurs. c) What is the area of deadweight loss? Does the neighborhood want to increase or decrease the level of gardening? If the neighborhood association wanted to effect this change, what measures could it take?

Price of Gardening ($) L M O P S U Q N MPB MC MSB Quantity of Gardening a) Using the letters on the diagram, describe the areas of (i) consumer surplus and (ii) producer surplus if the private market equilibrium occurs. b) Using the letters indicated on the diagram, describe the areas of (i) total social surplus and (ii) total externality if the socially optimal (Pareto efficient) level of gardening occurs. c) What is the area of deadweight loss? Does the neighborhood want to increase or decrease the level of gardening? If the neighborhood association wanted to effect this change, what measures could it take?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter1: Ten Principles Of Economics

Section: Chapter Questions

Problem 3QR

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