He bought a cell for $579. He doesn't like it anymore and posts it on instagram. He is willing to sell it if he gets a minimum of $194 for it. Someone is interested in the cell and is willing to pay a maximum of $504 for the cell. They negotiate and he sells her the cell at a price of $124. What is the total surplus created by him selling the cell to her? Assume no externalities. Include a negative sign if needed.

The market for seasonal flu shots is depicted in the graph. As more people receive flu shots, fewer people catch the flu and potentially pass it on to others. Therefore, the chance of catching the flu decreases for everyone, even those who do not purchase a flu shot. This is an example of a positive externality. The graph contains the private demand curve (D1) and the supply curve. D1 does not take into consideration the social benefit of people getting flu shots. Graph the social demand curve by placing the end points of D2 at the correct locations. Then, indicate the dead weight loss to society by placing the DWL triangle in the correct location on the graph. The Market for Flu Vaccinations D2 (marginal soeial benefit) DWL supply D1 (marginal private benefit) Quantity of flu shots Price ($)

The Centers for Disease Control and Prevention estimates that every alcoholic drink consumed generates roughly $2 in external economic costs. Suppose you're advising the Governor on alcohol policy. Would information about externalities suggest a tax or a subsidy would be a good policy, and how much in dollars should the policy be?

Question 3 Professor Paudel shows the graph for the case of negative externalities in the class. He wants the class to think about positive externalities as well. This got him thinking a lot about potential market failure due to positive production externality in the oil exploration market. Specifically, in his research, he found that expenditures on oil exploration by any company can have a positive externality because they offer more profitable opportunities for other companies. Professor Paudel wants you to enlighten him on the following issues: a) Graphically show private and social marginal cost functions and the demand curve. b) Under positive externalities as mentioned above, is the social marginal cost below than the private marginal cost? Explain and support your answers with the help of a clearly labeled graph. c) Under positive externalities as mentioned above, what's the relationship between social optimum quantity and the competitive market equilibrium quantity? Is there…