ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Respond to only one of the following: • Option A. Suppose one of your classmates has been placing an external cost on you by distracting you while you are trying to complete your assignments. Use what you have learned about how the government aims to address externalities in the market to explain how your teacher could address this negative externality so that your classmate chooses not to distract you. or Option B. Explain how providing education to all children in grades K-12 provides external benefits to everyone in the community.
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- Classify each statement as a positive externality associated with education or a negative externality associated with education. Positive externalties of education Negative externalities of education Answer Bank a higher voter participation rate reduced welfare dependency an increased standard of living lower crime ratesarrow_forwardDescribe one function of government in the economy other than correcting externalities. Provide an example.arrow_forwardEducation benefits both students and the community. Suppose students purchasing education consider only their own benefits when determining how much education to obtain and schools supplying education consider only their costs when determining how much education to supply. In this situation, the social benefit will be [(Click to select) the private benefit and the amount of education produced will be (Click to select) the socially efficient amount.arrow_forward
- suggest a potential solution to that student's problem. How would you internalize their externality or dissuade the free riding? A time I have experienced negative externality would be air pollution. The wild-fires in Canada have caused a tremendous amount of air pollution (smoke), while these fires are 'controlled' they have gotten out of hand and aren't benefiting the public. The smoke has created an unhealthy air level and can in some cases cause death, going outside I can clearly see the smoke that has traveled and I can smell it. Some of my friends have to stay inside because of health conditions, although it was meant to prevent a larger fire it has created a larger problem as it has gotten out control. This is problematic because there's almost no way of clearing up the smoke and people who will suffer from its outcome will not receive any compensation. It will also effect wild-life and plants, it will be hard to reverse the effects of this fire and the harm it has done. With…arrow_forwardKnowledge creates positive externality; therefore, governments should intervene in the education sector. What is the intervention action of governments for efficiency to gain from external benefits? Please explain each of these interventions with a clear example for each.arrow_forwardFill in the blanks: There is ____________ in an economy with positive externality. This problem can be dealt with by providing a _______ to the individual(s) creating the positive externality.arrow_forward
- These two situations have arisen: Agricultural technologies become available that if used reduce adverse effects fromfarming on environmental quality Water from a uranium mine is leaking into Kakadu NationalPark For each case you are to identify possible external effects that might occur and explain the conditions that would need to exist, and what the government or the affected parties could do, to change these negative situations for the betterment of one or both parties?arrow_forward(a) Explain the difference between a positive externality and a negative externality and why each result in an equilibrium point that is not optimal for society. (b) which externality results in an equilibrium quantity that is higher than the optimal social quantity of a good? (c) how can the impact of the externality in part b be corrected?arrow_forwardSuppose there are only two consumers in the market for a public good. The figure to the right shows marginal benefit lines for a public good for the two individuals, Andrew (A) and Brenda (B). Use the line drawing tool to draw and label the social marginal benefit line. Make sure that the line extends from quantity level 0 to 10 as the private marginal benefit lines do. Carefully follow the instructions above, and only draw the required object. Marginal Benefit, Marginal Cost ($) 20- 18- 16- 14- có + 2- 0- -O 0 1 MC 2 3 4 5 6 7 8 9 Quantity of a Public Good MBA MBB 10 11 12 Qarrow_forward
- #9. A safe and effective coronavirus vaccine has positive externalities. Is it efficient for the government to provide this vaccine to everyone for free? a. Yes. Goods with positive externalities should always be free. b. Uncertain. Goods with positive externalities should be subsidized, but making them free is not necessarily efficient. c. No. According to the First Fundamental Welfare Theorem, the market will provide the efficient amount of vaccines on its own. с. d. No. Goods with positive externalities should be taxed.arrow_forwardIn at least 150 words, answer the questions below. What difficulties occur when government attempt to use Ligurian taxes/ subsidies to address externalities.arrow_forwardPolicymakers realize that, although education creates a positive benefit for those who obtain it, it also creates external benefits for the community where the educated individual resides. The graph depicts the marginal social cost (MSC) and the marginal social benefit (MSB) associated with education. On the graph, move the point, P, to the point representing the optimal level of education. Dollars (thousands) 100 90 80 70 60 50 40 30 20 10 0 0 2 4 MSC MSB 6 8 10 12 14 16 18 20 22 Years of schooling optimal schooling: 14 What is the socially optimal number of years of schooling for each citizen? yearsarrow_forward
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