SCENARIO: Greater consumption of alcohol leads to more motor vehicle accidents and, thus, imposes costs on people who do not drink and drive. (1) The type of market failure represented by the scenario is a/an (2) The market fails in this scenario because (3) Solution to the market failure is ◆ ◆
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Please answer the first three questions (#'s 1, 2 and 3)
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- When externalities cause markets to be inefficient (x) government action is sometimes needed to solve the problem. (y) private solutions can be developed to solve the problem. (z) there is a way to eliminate the problem of externalities in the market if producers are provided with the appropriate incentives to internalize the externality. Select one or more: a. (x), (y) and (z) b. (x) and (y) only c. (x) and (z) only d. (y) and (z) only e. (z) onlyThere are two common problems in markets (sometimes described as market failures). For each problem listed below answer the following questions: <Tragedy of the Commons><Free-Rider Problem> (a) Does this problem appear in the market for public, private, common-pool or club goods?(b) Is the problem because the good is non-rival in use and/or because the good is non-excludable?(c) Can this problem be resolved? If so, how? If not, why not?(d) Please give an example of the type of good or market in which this problem appears.Answer the following questions for the given example: Using water pumps in homes (a) Does an externality exist? If so, is it positive/negative (or both) (b) Use Coase’s framework to identify the cause of the externality (c) If an externality exists, determine whether the Coase theorem applies (i.e. is it possible/feasible to assign property rights and solve the problem?). Provide reasoning. (d) If an externality exists and the Coase theorem does not apply, discuss a government/institutional solution that can mitigate the problem of externality. Provide reasoning.
- When a new park is constructed in the town of Mountainview there is an increase in both demand and supply of accommodations for tourists. The area shaded in red below would represent the benefit to society of the park in a benefit cost analysis. P Select one: O a. True O b. False D₁ D₂ S₁ S₂ QAccommodationsdont use chatgpt answer urgent In a situation where an externality occurs, the "third party" refers to those who a) buy the product from others. b) produce the product for others. c) trade the product with others outside the nation or community. d) are not directly involved in the transaction or activity.52. Which of the following statements is TRUE? (A) COVID-19 is uniquely deadly. (B) Asymptomatic spread is a key driver of COVID-19 outbreaks. (C) Vaccines reduce the spread of COVID-19. (D) People who die with COVID-19 typically have comorbidities.
- The Filthy Chemical Company dumps 100 tons of pollutants every year in the Pristine Lake. The Trout Fishing Co., the only other user of the lake,estimates that if Q tons of pollution were cleaned up every year its profits would rise according to the relation Filthy estimates it can clean the pollutants at constant average costs of $2 per ton. (a) In the interest of efficiency, how much pollution should be cleaned up every year? (b) Suppose Filthy bought Trout. How much would it clean up? What if Trout bought Filthy?(a) The construction of a beach-front resort has led to erosion of the seabed, destruction of corals and reducing the catch of fishermen operating in the vicinity. Draw a diagram to analyse the efficiency issue in this incident. If the fishermen and the resort owner can negotiate costlessly and the fishermen has the legal right to the sea that is free from any damages, how would this problem be resolved? (b) Consider a product market with three consumers A, B and C with demand function PA = 6 – QA, PB = 6 – 2QB and PC = 12 – QC respectively, where P is the price in dollars and QA, QB and QC are the quantities demanded by Consumer A, B and C respectively. The marginal cost of the product is constant at $4. (i) If the product is public good, analyse the product and determine the optimal quantity of the product in the market.(ii) How will your answer be different if the product is a private good instead? Hi, may i request for a more detailed explanation to this question? thank you for…(a) The construction of a beach-front resort has led to erosion of the seabed, destruction of corals and reducing the catch of fishermen operating in the vicinity. Draw a diagram to analyse the efficiency issue in this incident. If the fishermen and the resort owner can negotiate costlessly and the fishermen has the legal right to the sea that is free from any damages, how would this problem be resolved? (b) Consider a product market with three consumers A, B and C with demand function PA = 6 – QA, PB = 6 – 2QB and PC = 12 – QC respectively, where P is the price in dollars and QA, QB and QC are the quantities demanded by Consumer A, B and C respectively. The marginal cost of the product is constant at $4. (i) If the product is public good, analyse the product and determine the optimal quantity of the product in the market. (ii) How will your answer be different if the product is a private good instead?
- Individuals go for flu injection not only protect themselves against flu but also help to prevent the disease from spreading in the community. (a) What type of externality occurs in the flu injection market? (b) Is the market outcome efficient? (c) What can the government do to rectify the externality issue?If the market for a good is producing a negative externality in production (e.g. a polluting firm):(a) In market equilibrium, the marginal cost (MC) to society exceeds the marginal cost (MC) of production.b) In market equilibrium the marginal benefits to society exceed the marginal cost (MC) of production.(c) In market equilibrium the marginal costs (MC) to society exceed the total benefits to societyd) In market equilibrium the private Cmg (MC) of production exceeds the Cmg (MC) for society.For each of the alternatives, explain which is correct and explain which are false or uncertain.3) There are three industrial firms in Cleạnair County. Cost of Reducing Pollution by 1 unit $30 $35 Firm Initial Pollution Level Alpha 80 units Bravo 70 units Charlie 60 units $20 The government wants to reduce pollution to 150 units, so it considers the following policy approaches. (a) Require that every firm reduces its pollution to 50 units. How much would it cost the three firms to reduce pollution to the required level? (b) Allocate 50 tradeable pollution permits to each of the firms. Who sells permits and how many do they sell? Who buys permits and how many do they buy? Briefly explain why the sellers and buyers are each willing to do so. What is the total cost of pollution reduction in this situation?