Consider a competitive market with an MPB = 22 - q and an MPC = 10 +q. There is a negative production externality of e = q, where q is the level of output in the market, the government can achieve the efficient level of output by: Implementing a per-unit tax of $4 on suppliers. None of the other answers is correct Implementing a per-unit tax of $10 on suppliers. Implementing a per-unit tax of $6 on suppliers. Implementing a per-unit tax of $8 on suppliers.

Consider a competitive market with an MPB = 22 - q and an MPC = 10 +q. There is a negative production externality of e = q, where q is the level of output in the market, the government can achieve the efficient level of output by: Implementing a per-unit tax of $4 on suppliers. None of the other answers is correct Implementing a per-unit tax of $10 on suppliers. Implementing a per-unit tax of $6 on suppliers. Implementing a per-unit tax of $8 on suppliers.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter30: Market Failure: Externalities, Public Goods, And Asymmetric Information

Section: Chapter Questions

Problem 2WNG

See similar textbooks

Similar questions

Let Q be the quantity of natural gas in tons from fracking. Assume fracking imposes a negative externality of $24 per ton. The private demand for natural gas from fracking is P = 200 - 4Q while the private supply curve is P = 20 + 2Q. If the government imposes a $24 tax per ton of natural gas from fracking, what is the change in the total surplus from before to after the imposition of the tax? O -$672. O $48. O $672. -$48.
A market for a good contains a negative production externality. The following functions describe the market: MPB = 171 - 0.15Q MPC = 13 + 0.1Q MEC = 19 Currently there is no tax. Calculate the benefit if the government adds a tax of $8 per unit.
The market for plasticans is perfectly competitive. Market Supply is given by Q=8P and Market Demand is given by Q=422-3P. Each extra unit of plastican produced imposes a negative externality of $6. Implement the optimal Pigouvian tax/subsidy that implements the efficient outcome. What is the Producer Surplus in the equilibrium with the tax? Enter a number only, no $ sign. 5,395.82
Which of the following types of goods and services should be taxed in order to discourage their production? Which of the following types of goods and services should be taxed in order to discourage their production? Goods and services with high inocme elasticities of demand Goods and services with negative externalities Goods and services with high price elasticities of demand Goods and services with positive externalities
The market for plasticans is perfectly competitive. Market Supply is givenby Q=5P and Market Demand is given by Q=373-3P. Each extra unit ofplastican produced creates a positive externality of $6. Implement theoptimal Pigouvian tax/subsidy that implements the efficient outcome.What is the Consumer Surplus in the equilibrium with the tax/subsidy?
Explain how subsidies provided by the government to producers solve their externalities
University researchers create a positive externality because what they discover in their research labs can easily be learned by others who haven't contributed to the research costs. If there are no subsidies, what is the relationship between the equilibrium quantity of university research and the optimal quantity of university research produced? O The equilibrium quantity is greater than the socially optimal quantity O There is not enough information to answer this question O The equilibrium quantity is less than the socially optimal quantity O They are equal
A negative externality means the quantity in the market is _____ the allocatively efficient quanitity and can be corrected by a _____. A positive externality means the quantity in the market is _____ the allocatively efficient quantity and can be corrected by a ______. Word Bank: Larger than, tax, smaller than, subsidy, smaller than, equal to, subsidy, larger than, equal to, tax.
The market for plasticans is perfectly competitive. Market Supply is givenby Q=7P and Market Demand is given by Q=455-2P. Each extra unit ofplastican produced imposes a negative externality of $8. Implement theoptimal Pigouvian tax/subsidy that implements the efficient outcome.
Market Supply is given by P=2Q and Market Demand is given by P=189-2Q. Each extra produced creates a negative externality of $4. Implement the optimal Pigouvian tax/subsidy that implements the efficient outcome. Then, what is the Consumer Surplus in equilibrium with the tax or subsidy?
Which of these is a negative production externality? An airline manufacturer must hold up production of a plane at great cost due to delays in its global supply chain. A cereal manufacturer suffers losses due to a drought and unexpected increases in market prices of grains that it uses in its cereals. O Consumers complain to the wrong regulators about price gouging in gasoline markets. A producer of lead for batteries that are used nationwide emits noxious gases in its factory town and local people are getting sick. Thch Save
Consider placing a tax on a good that has a positive benefit externality of MEB=3 where MSC=2Q and MPB = 21-Q. a. Compare the equilibrium outputs with (i) no tax, (ii) with a Tax of $3, and (iii) at the social optimu. b. In this case, what happens to DWL when a tax is added? Show and explain your reasoning.