The President of ALS Society of America asks you to determine whether the level of ALS research in the U.S. is close to where it should be. You decide to estimate the demand and supply curves for ALS research, which you are thinking of as a pure public good. You find that there are two types of people in the U.S., each with a very different demand for autism research: Mother Teresas: P-$50-2Q Scrooges: P=$10-Q You also estimate that the marginal cost of producing each ALS study is $20. a. Sketch the Demand Curves for Mother Teresas and for Scrooges? Label the x and y Intercepts. Mother Teresas: P-$50 when Q-0 Q-25 when P-0 Scrooges: P-$10 when Q-0 Q-10 when P-0

Since healthcare is provided by the NHS in the UK, it is a public good rather than a private good.  Question 25Select one: True False Question text If a good is excludable and has a near-zero marginal cost, it is probably a club good.  Question 26Select one: True False Question text Given that there is a limited quantity of pollution we can add to the Earth's atmosphere before it becomes degraded, we can regard the air as a common-pool resource.  Question 27Select one: True False Question text Positive externalities can cause Pareto-inefficiency.  Question 28Select one: True False

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). Compare the two mechanisms (administrative and price) for rationing the service. How do they compare in terms of efficiency (the size of the pie) and in terms of distributional impacts (the way the pie is divided up between the service users and taxpayers)?

Scenario 10-1 The demand curve for gasoline slopes downward and the supply curve for gasoline slopes upward. The production of the 1,000th gallon of gasoline entails the following: a private cost of $3.10 • a social cost of $3-55 a value to consumers of $3.70 Refer to Scenario 10-1. Suppose the equilibrium quantity of gasoline is 1,150 gallons; that is, QMARKET = 1,150. Then the equilibrium price of a gallon could be a. $3.30. b. $3.80. c. $3.00. d. $2.80.

Consider the supply & demand diagram below representing the market for food among the obese population. Understand that there is a consumption-related externality among the obese population. Before any policy is introduced, what area(s) on the chart represent consumer surplus? DEU Obese Group a MSC K d MEC b C MPC MPB=MSB Q₁ Q₂ Price P₂ 2 P₁ a C d None of the above Quantity

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…

The cost (supply) of each "unit" of NPR (National Public Radio) is P=9. Derek's valuation for each unit of NPR (demand) is given by Pp=20-2Q, and Kim's valuation is given by Pk=10-Q. The social valuation of NPR is Ps= Q. The socially optimal amount of NPR is units. Without intervention, the private market would lead to an 수 of NPR. Suppose the government decides to subsidize NPR in order to achieve the socially optimal amount of NPR. The total demand function is Qr= The appropriate subsidy is $ (include 2 decimals) per unit of NPR

Indicate whether the statement is true or false, and justify your answer.Pigouvian taxes always improve social welfare.

Because the federal government typically provides disaster relief to farmers, many farmers do not buy crop insurance even though it is federally subsidized.  This illustrates:      explain your answer   The adverse selection problem The moral hazard problem A failure of the market for externalities The existence of positive externalities

define and explain the importance of adverse selection