Consider consumption involving a negative externality. Which of the following is wrong? Group of answer choices A) A tax on consumption may decrease the deadweight loss B) A tax on producers could increase the quantity traded to the socially optimal level C) A price floor could bring the quantity traded to the socially optimal level D) A tax on consumption reduces the quantity traded in the market E) None of the above

The supply and demand conditions facing a firm that makes widgets and generates a negative externality by dumping a highly toxic sludge in a nearby river is given in the table below.   Price Quantity Demanded Quantity Supplied without Paying Social Costs Quantity Supplied after Paying Social Costs 100 0 120 75 80 10 100 50 55 30 90 30 40 55 85 25 30 80 80 20 20 100 65 15       The equilibrium price and quantity when social costs are taken into account are Question 3 options:   Price = $55; Quantity 30   Price = $40; Quantity 55   Price = $30; Quantity 20   Price = $30; Quantity 80

Consider the supply & demand diagram below representing the market for food among the obese population. Understand that there is a consumption-related externality among the obese population. Before any policy is introduced, what area(s) on the chart represent consumer surplus? DEU Obese Group a MSC K d MEC b C MPC MPB=MSB Q₁ Q₂ Price P₂ 2 P₁ a C d None of the above Quantity

What would happen if the government subsidized consumption of this product because it has positive externalities in consumption?

What is the socially optimal quantity, and how much is the social cost at this quantity?

The restaurant industry develops an exciting new technology, a robot that quickly prepares food in half the usual time of chefs. This increases supply (producers save costs on labor) and demand (consumers find it fun to watch the robot make a meal) such that the price remains constant. However, the robot runs on coal and produces a lot of pollution, generating an external cost on production. How do consumer and producer surplus change as a result of this new technology? Choice 1 of 4:Consumer surplus increases but the change in producer surplus is indeterminateChoice 2 of 4:Producer surplus increases but the change in consumer surplus is indeterminateChoice 3 of 4:Both producer and consumer surplus increaseChoice 4 of 4:Both producer and consumer surplus decrease

The price of good X is $7. But each unit of good X produces has an external cost of $1. What is the social cost of one unit of good X?

The market for perfume is characterized by:  MPB=200-Q and MPC= 3Q with a marginal social benefit of -$12 caused by the others smelling the perfume.  The externality is ______ and on the _____ side of the market.  The inefficient quantity is ______ and the price is _____.  The allocatively efficient quantity in the market is ______.  If the government were to correct the externality, it would _______ the market by $______ per unit of perfume. Word Bank: negative, demand, 50, 150, 47, tax, 12, positive, supply, subsidy

Suppose demand is QD=9−P and supply is QS=P. There is a constant positive externality of ​$4 per unit​ (marginal external​ benefit, MEB​ = ​$4​). Find the market equilibrium quantity and the socially optimal quantity. The market equilibrium quantity is    enter your response here. ​(Round your answer to one decimal place.​) The socially optimal quantity is    enter your response here. ​(Round your answer to one decimal place.​)

Question 22 Refer to Figure 2  in Question 20. What price and quantity combination best represents the socially optimum price and number of concerts that should be organized? Group of answer choices P1 and Q0 P1 and Q1 P2 and Q0 P2 and Q1