3.1. (Government) Complete each of the following sentences: a. When the private operation of a market leads to overproduction or underproduction of some good, this is known as a(n) _________________. b. Goods that are nonrival and nonexcludable are known as __________________. c. ________________ are cash or in-kind benefits given to individuals as outright grants from the government. d. A(n) ________________ confers an external benefit on third parties that are not directly involved in a market transaction. e. ________________ refers to the government’s pursuit of full employment and price stability through variations in taxes and government spending.

1. Briefly discuss some ways the government could ensure a market with a positive externality could encourage production of the socially optimal output.   2. Do you believe higher education provides our economy with a positive externality? Why or why not? Do you believe the steps that the federal government takes to encourage the socially optimal amount of higher education be produced/consumed is appropriate? Too much? Too little? Why? (Use appropriate economic theory to support your position.)

BN8.1 Public Goods are both Non-Rival & Non-Exclusive. Explain each of these Terms & Show how they differ from each other.

9. Assume that the city government of Pollutersville taxes the production of electricity in an effort to make the market internalize the external cost imposed on society in the form of air pollution that is created when coal is burned to produce electricity. a. Draw a supply and demand diagram for electricity in Pollutersville. Be sure to label your axes, curves, and intercepts, as well as MSC, MSB, MPC, MSB curves and the amount of the tax. b. If the government imposes a tax equal to the amount of the marginal external cost generated by each kwh of electricity, is there any deadweight loss in the market? Explain in one sentence of less. C. Discuss the changes in welfare for consumers, producers, society, and those individuals affected by the pollution once the tax is imposed. 4

Problem 05-01 (algo) On the basis of the three Individual demand schedules in the following table, and assuming these are the only three people in the society, determine a. the market demand schedule on the assumption that the good is a private good and b. the collective demand schedule on the assumption that the good is a public good. Instructions: Enter your answers as a whole number. Individual 1 Individual 2 Individual 3 (a) Private Demand (b) Public Demand Price Qd Price Qd Price Qd Price Qd Price Qd $8 0 $8 1 $8 0 $8 1 1 7 0 7 2 7 0 7 2 2 6 0 6 3 6 1 в 4 3 5 1 5 4 5 2 5 7 4 4 2 4 5 4 3 4 10 5 3 3 3 в 3 4 3 13 в 2 4 2 7 2 5 2 16 7 1 5 1 8 1 6 1 19 8

2. Last year, nearly 200 countries agreed on a plan to limit greenhouse gas emissions, in an effort to limit climate change. One of the challenges in creating such a plan is that climate change is a global phenomenon, depending on total emissions from all countries. Which of the following best describes the benefits of a plan that reduces global warming? a. It's a common pool resource; countries will tend to contribute too much to global warming efforts b. It's a public good; countries will tend to contribute too much to global warming efforts C. It's a common pool resource; countries will tend to contribute too little to global warming efforts d. It's a public good; countries will tend to contribute too little to global warming efforts e. None of the above

1. What kind of good is it? Determine whether each of the following goods is a private good, a public good, a common resource, or a club good. Private Good Public Good Club Good Common Resource A new drone that you take turns flying with your friends A large, beautiful fountain in a town square A dock on a lake that is open to the public

5. Property rights and market failures Loggers are much likely to supply wood to the market if property rights are not enforced. In the presence of market failures, public policy can improve economic efficiency. Classify the source of market failure in each case listed. Market Market Failure Power Externality A manufacturing plant dumps chemical waste into a nearby river, poisoning the water supply for a small town downstream. A single grocery store is the only source of food in a small town, giving the store the ability to influence the price of food.

5

I need help with d and e