The members of a neighborhood community have been having a problem with mosquitoes. Although people have been complaining, only a few residents have had their lawns professionally sprayed for mosquitoes. The homeowner's association decides to use some of the association dues to provide vouchers to reduce the costs for residents who would like to have their properties sprayed. Match each statement about the effects of the voucher policy to the correct graph for the mosquito-spraying market. Click on the graphs to enlarge. Drag each item on the left to its matching item on the right. The Dinternal curve will shift toward the Dsocial curve. Chemicals from the mosquito spray may leach into the groundwater. The deadweight loss of mosquito spraying will be reduced or eliminated. Neighborhood visitors will receive fewer mosquito bites. Price Price E-social optimum Q₂ E-market equilibrium Quantity Quantity

Give an example for a negative or positive externality and explain the inefficiency this negative or positive externality might cause. How should the government deal with this negative or positive externality? (regulation, taxes, subsidies, private remedies, etc.) What would be the most appropriate remedy for your example?

Use a graph to illustrate the quantity of pollution that would be emitted (a) after a corrective tax has been imposed and (b) after tradable pollution permits have been imposed. Could these two quantities ever be equivalent?

Define what is externality in detail.

Sylvester and Rachel live together on an island with two goods, food and shelter. Food is a private good and shelter is a public good. The utility function of Sylvester is U= Fs + 2(Zs + Zr) where Fs is the amount of food he buys, Zs is the amount of shelter he buys and Zr is the amount of shelter Rachel buys. Similarly, the utility function of Rachel is U= Fr + Zs + Zr where Fris the amount of food she buys. Suppose the price of food is 10 and both Sylvester and Rachel have 100 to spend. Suppose also that it is not possible for Sylvester and Rachel to reach any kind of agreement. a. Determine the quantity of shelter they will buy and the efficient quantity of shelter if the price of shelter is 5? (Enter your answer in whole number.) Quantity of Shelter: 120 units Efficient b. What is the quantity of shelter they will buy if the price of the shelter is 15? (Round your answer to 2 decimal places (e.g., 32.16).) Quantity of Shelter: 30 units Not Efficient c. What is the quantity of…

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…

The pandemic has upended the way New Yorkers dine out: There are sidewalk tables, open streets, streeteries, and barely anyone eating indoors. Now, as the weather gets colder, there are also plastic bubbles out on sidewalks, too. A video of the dome-shaped tents on a West Village street went viral this week, prompting questions of how safe they are, not to mention just what they are. Bubbles of various sorts have shown up around the country since restaurants began to ease into this new, strange era of dining out. […] But the igloolike tents can also get costly and require strict sanitation measures, and some health experts question how safe they actually are. … the big question: Are these things safe? Along with sanitation protocols, most restaurants use flameless candles inside the bubbles in hopes of avoiding any melt-y fires (PVC is toxic when it burns). But the biggest concern is of course the reason for the bubble in the first place, COVID. Dr. Abraar Karan is an internal…

Use a supply and demand graph to show a good which should be illegal owing to it's negative externality.

Consider the above graph. Is there an externality present in this market? If so, what kind?   No, there is no externality.   Yes, a negative externality.   Yes, a positive externality.

Malaria Eradication Back on the Table In response to the Gates Malaria Forum in October 2007, countries are debating the pros and cons of eradication. Dr. Arata Kochi of the World Health Organization believes that with enough money malaria cases could be cut by 90 percent, but it would be very expensive to eliminate the remaining 10 percent of cases, so countries should not strive to eradicate malaria. Make a graph with the percentage of malaria cases eliminated on the x -axis and the marginal cost and marginal benefit of driving down malaria cases on the y -axis. On your graph: (i) Draw a marginal cost curve and marginal benefit curve that are consistent with Dr. Kochi’s opinion. (ii) Identify the quantity of malaria eradicated that achieves allocative efficiency.