ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Suppose Hawi lives alone. She has two pet hamsters; she likes the hamsters because they are cute. But cleaning their cage every day is a hassle. In this case, Hawi's hamsters entail:
A. an external cost
B. a negative externality
C. an external benefit
D. neither an external cost nor an external benefit
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- When externalities are present, the government can O A. tax the firm in order to raise the social cost to the private cost. eliminate the external costs. 00 B. O C. O D. None of the above. tax the firm in order to raise the private cost to the social cost.arrow_forwardPrice Ssocial Sinternal $7.00 $6.00 $5.00 D $4.00 Dinternal 3,000 3,500 Quantity externality. In the market shown in the diagram above, there is a Select one: a. negative production b. negative consumption c. positive production d. positive consumptionarrow_forwardOnly typed answerarrow_forward
- Please only answer D.arrow_forwardSolve all partsarrow_forwardThe production Compact Fluorescent Lightbulbs (CFL) use mercury in their production process. Mercury is a heavy metal and considered bad for the environment. Suppose the marginal external cost is $5 per lightbulb and the government levies a corrective tax of $5.50 per lightbulb. With this new tax: Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a b Question 4 с d The price will be below the marginal social cost. Not enough light bulbs will be produced. The price will be below the marginal social benefit. The price will be below the marginal cost to produce light bulbs.arrow_forward
- Fish that swim in international waters are a common good that are freely available toanyone who wants to catch them, but this leads to the problem of over-fishing. At theheart of this problem lies an externality. Using appropriate diagrams andaccompanying discussion, show both how and why this over-fishing takes place. Inyour explanation, identify the source of the externality.arrow_forwardA local school administrator observes an increase in the number of flu cases in the public schools over the last two years. She is concerned that some families cannot afford flu vaccine and are therefore not having children vaccinated. She is also concerned that the failure to vaccinate some children is putting other children at risk, so she proposes that the state subsidize vaccines to increase coverage rates. a. Determine whether the failure to vaccinate some children is an external benefit or an external cost. If an external cost is present, move point A and point B to show the marginal social cost curve. If an external benefit is present, move point A and point B to show the marginal social benefit curve. Place point C at the equilibrium outcome. Place point D at the socially optimal outcome. Flu vaccines A B D Supply (marginal private cost) Pricearrow_forwardWhat is an external benefit? An external benefit is a benefit that OA. always equals external cost OB. experiences increasing marginal returns C. affects someone other than the buyer of a good OD. is greatest at the equilibrium pointarrow_forward
- Externalities Do you think that there would be external effects associated with Water from a uranium mine leaking into Kakadu National Park? If so, what would be the nature of the external effects? Can you think of policies that might deal with each external effect (that is, improve social wellbeing)?arrow_forwardA negative externality causes Select one: a. the social cost of production to be greater than the private cost. b. the social cost of production to be the same as the private cost. c. None of the answers are correct d. the social cost of production to be less than the private cost.arrow_forwardWhich one does not belong to the externalities contributed by oil? a. Emissions that pollute the environment. b. National security c. Hydrocarbons that potentially contribute to climate d. Mercury emission from burning oil to produce electricity.arrow_forward
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