Suppose that the Marginal Social Benetit associated with drinking water quality is estimated to be MSB = 100 – 0.5 A , where A is the percentage of mercury abated from drinking water and MSB is measured in millions of dollars, Find the total social benefit

Suppose a new social service is introduced by a government at a fixed cost of $3,000 (note: there is no marginal cost to provide this service). This service has not been provided before and there is no available substitute for this service. Economists have estimated the marginal benefit of the new service is given by: MB = 100 – Q where Q is the quantity (in hours) of the service that is used. Please note the MB gives both the marginal private benefit (MPB) and marginal social benefit (MSB) (i.e., MB = MPB = MSB). The government imposes a price to ration use of the service to recover part of its costs. What price should be introduced to ration the use of the service to 50 hours? What is the net social benefit when the service charge is used?  How does charging a price compare to providing it for free and/or rationing?  Be Hint(s): similarly, think about measuring the area of consumer surplus and compare it to the governments cost.  You may want to complete Q5 as you complete this…

Are utilities a public good, by definition?

Consider the market for trees in a public park. These trees are a public good that give benefits to multiple groups of people, as described below. Each Marginal Willingness to Pay curve represents the aggregation of all the individuals in that group, and those groups make decisions collectively. Additionally, the cost of planting trees is given. Consider Q to be the number of trees in the park. Note that no one is ever worse off from additional trees.   Arborists: MWTP = 2000 – 5Q                                  Total WTP = 2000Q - 2.5Q2 Environmentalists: MWTP = 1500 – 10Q                 Total WTP = 1500Q – 5Q2 Casual Park Visitors: MWTP = 800 – 10Q                Total WTP = 800Q – 5Q2 Park Haters: MWTP = 500 – 50Q                              Total WTP = 500Q – 25Q2 MC = 1400                                                                  Total Cost = 1400Q   (a) If the government does not intervene into the market, how many trees will be planted? (b) What is the socially…

Firms in a polluting industry can be classified in two groups: newer firms with a cleaner technology that can abate pollution at a lower marginal cost MCLA = (1/2)aL and older firms with dirtier MCHA = aH, where ai is the level of abatement undertaken by firms of type i = L, H. The social marginal benefit of abating pollution from this particular industry is MBA= 120 - A, where A is the aggregate level of abatement in that industry. What Pigouvian tax t will implement the efficient allocation (aL, aH)? Is the resulting allocation an efficient allocation? What is the government's tax revenue?

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$100 Price 80 60 40 20 0 100 200 300 400 500 600. Quantity of Health Care Refer to the graph for the health care market. A health insurance plan that pays four-fifths of the cost of a consumer's health care leads to Multiple Choice S O overconsumption of health care by 300 units. overconsumption of health care by 600 units. D

Show the market for cigarettes in equilibrium, assuming that there are no laws banning smoking in public. Label the equilibrium private market price and quantity as Pm and Qm. Add whatever is needed to the model to show the impact of the negative externality from second-hand smoking. (Hint: In this case it is the consumers,notthesellers,whoarecreatingthenegative externality.)Labelthesocialoptimaloutputandpriceas PeandQe.Onthegraph,shadeinthedeadweightlossat the market output.

Three neighboring towns – Marshland, Dampland, and Wetland – all border the           same lake.  The lake frequently floods causing damage to property in all three           towns.  Each town would benefit from flood mitigation, but the level of benefits           differs.  With Z representing the level of mitigation:     for Marshland, MB = 3 – Z     for Dampland, MB = 4 – 2Z     for Wetland, MB = 11- Z            The marginal cost of flood mitigation is MC = 2 + 12Z Questions:                                    ***Please Note***  Previous Expert Calculated:     Z = 16/3 as the Solution to (a)        Math Solver Calculates:     Z = 1                                    ***Please Resolve*** (a)  What is the socially optimal level of Z?                      (b)  What would each individual town be willing to pay for this level of flood mitigation? (c)   The representative from Wetland proposes that each town pay an equal share for the optimal level of flood          mitigation.  Would…