PRICE (Dollars per unit) An externality arises when a firm or person engages in an activity that affects the wellbeing of a third party, yet neither pays nor receives any compensation for that effect. If the impact on the third party is adverse, it is called a externality. The following graph shows the demand and supply curves for a good with this type of externality. The dashed drop lines on the graph reflect the market equilibrium price and quantity for this good. Adjust one or both of the curves to reflect the presence of the externality. If the social cost of producing the good is not equal to the private cost, then you should drag the supply curve to reflect the social costs of producing the good; similarly, if the social value of producing the good is not equal to the private value, then you should drag the demand curve to reflect the social value of consuming the good. QUANTITY (Units) Supply Demand Demand Supply With this type of externality, in the absence of government intervention, the market equilibrium quantity produced will be socially optimal quantity. Which of the following generate the type of externality previously described? Check all that apply. than the The city where you live has granted a permit to put a movie theater in your neighborhood, causing traffic jams at night and on weekends. Your roommate Gilberto has bought a bird that keeps you up at night with its chirping. A leading electronics manufacturer has discovered a new technology that dramatically improves the picture quality of plasma televisions. Firms of all brands have free access to this technology. Charles has planted several trees in his backyard that increase the beauty of the neighborhood, especially during the fall foliage season.

A car wash service 'Clean and Shine' is a small business operating in the short run in a perfectly competitive market. The business has to pay for electricity and water as much as IDR200 thousand a month, whereas its variable cost (VC) is expressed as a function of the number of cars washed (q): VC(q) = 5q + 0,1q² (in thousands of rupiah) Currently the price of car wash services is IDR35 thousand/car.

What is the price of gasoline per litre in Canadian dollars if a U.S. gallon of gasoline costs US$2.357 One U.S. dollar is worth C$0.98 and one U.S. gallon is equivalent to 3.8 litres. CIT The cost per litre is C$. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

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