Bower likes to plant trees in his front year. His neighbors also derive pleasure form the trees in hisfront year. That is, Bower's trees provide a positive externality for the neighborhood. His marginalprivate benefit and the marginal social benefit (his and that received by his neighbors combined) arerepresented on the graph below, along with the marginal cost of planting a tree.Price, Cest (oll)$S0.0045.00.40.00A35.000 00Margiaal Cot25.0020.0015.00argnel Soeiel Benettje 005.00agnal hirde Bandfil24 5Quantity (mber of trees)Suppose the neighborhood subsidies Bower's trees. That is, neighbors give him enough money toplant the socially optimal number of trees. What area on the graph would be equal to the net socialgain resulting form the subsidy?OAВOcOA+ B

Answered: Image /qna-images/answer/5562e493-7452-4906-86ca-b5d21415513d.jpg

Bower likes to plant trees in his front year. His neighbors also derive pleasure form the trees in his front year. That is, Bower's trees provide a positive externality for the neighborhood. His marginal private benefit and the marginal social benefit (his and that received by his neighbors combined) are represented on the graph below, along with the marginal cost of planting a tree. Prie, Cest (kole) $ 00 45.00 40.00 1.00 00 Mgial Ou 25.00 20.00 15.00 10.00 1.00 I 4 S68 Quanity (mber of wees) Suppose the neighborhood subsidies Bower's trees. That is, neighbors give him enough money to plant the socially optimal number of trees. What area on the graph would be equal to the net social gain resulting form the subsidy? OA OB Oc OA+B

Bower likes to plant trees in his front year. His neighbors also derive pleasure form the trees in his front year. That is, Bower's trees provide a positive externality for the neighborhood. His marginal private benefit and the marginal social benefit (his and that received by his neighbors combined) are represented on the graph below, along with the marginal cost of planting a tree. Prie, Cest (kole) $ 00 45.00 40.00 1.00 00 Mgial Ou 25.00 20.00 15.00 10.00 1.00 I 4 S68 Quanity (mber of wees) Suppose the neighborhood subsidies Bower's trees. That is, neighbors give him enough money to plant the socially optimal number of trees. What area on the graph would be equal to the net social gain resulting form the subsidy? OA OB Oc OA+B

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

1. Suppose that a polluting activity has marginal damage and marginal abatement costs given by MD=2E and MAC = 210 - 3E, respectively. Suppose that the polluter(s) are held liable for damages. (a) What level of emissions will be chosen by polluters. (b) Compute the amount of damages (compensation) that will be paid by polluters and the total of all costs paid by polluters. (c) Compute the social gains from instituting legal liability, relative to the no-abatement outcome.
Only typed answer
500 450 The graph on the right may help in answering question 25 400 350 300 250 200 150 100 50 O 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 Quantity Demand MC Exter nality MC private MC Social A competitive tire manufacturing industry spews emissions into the air at47 per tire a marginal cost of 1.5-q, where q is the quantity of tires produced per month (in thousands). The industry marginal cost, excluding the cost of emissions (private marginal cost), is 4 + 4•q, expressed in $ per tire. The inverse demand curve for tires is p = 480 - 3-q, also expressed in $ per tire. In order to achieve the socially efficient level of tire production, which takes into account the optimal level of air pollution, the government levies a tax on the industry. What is the efficient pollution tax? $84 per tire $101 per tire $152 per tire Price
$ MAC 69 0 K A. The total benefit of that decision is represented by area(s) B. The total cost of that decision is represented by area(s) M Suppose that emissions were to decrease from the unregulated level to the optimal level. C. The net benefit of that decision is represented by area(s) MD ◆ e ◆
What is the importance of the enforcement private property rights as it relates to the mitigation of market failure & supporting conservation ?
4
C.F5 % 16 5 F6 6 PRICE F7 87 63 & 42 36 24 15 0 Refer to Figure 10-5. The socially optimal quantity of outpurus O a. 240 units, since the value to the buyer of the 240th unit is equal to the cost incurred by the seller of the 240th unit. O b. 240 units, since the value to society of the 240th unit is equal to the cost incurred by the seller of the 240th unit. O c. 420 units, since the value to the buyer of the 420th unit is equal to the cost incurred by the seller of the 420th unit. O d. 420 units, since the value to society of the 420th unit is equal to the cost incurred by the seller of the 420th unit. F8 * 8 240 8 QUANTITY F9 ( 9 420 Y JUDUL F10 Supply O Social Value Demand -O- ) F F11 O:+ F12 || PrtSc 000 =
Only typed answer
Public investment projects should provide benefits for the public's greater good that exceed the_ O present worth O annual worth O costs O payback period of providing those benefits.
What are the benefits and costs of land-use regulations such as inclusionary zoning for urban growth and sustainability?
5 Estimated U.S. taxpayer subsidies in green energy technology through 2013 are about $125 billion. Under what circumstances does the federal government need to undertake these subsidies as opposed to letting private companies themselves pay for such investments?
25. Suppose that there is a large farm and a large recreation firm located on a river. The farm is upstream of the recreational area. The farm uses the streamflow for irrigation. Let S be the amount of streamflow used by the farm and suppose its marginal benefit for irrigation is given by MB-5000-15S. Use of streamflow by the farm is costly to the recreational firm, though, because of lost opportunities for boating, fishing, and camping. Suppose this marginal cost is given by MC=5s. (a) Draw a sketch of the MB and MC curves for use of S by the farm. On your graph, show the efficient level of S by the farm. Solve for this amount from the equations. (b) If unregulated, the farm uses streamflow at a price of zero. Show on your graph what S this corresponds to. Solve for it from the equations. (c) If the government sets a tax price on streamflow, what tax price per unit of S will result in the farm using the efficient level of streamflow? Show on your graph and find with the equations. (d)…