Use the graph below to answer the following questions. 50 40 30 20 10 200 400 Social Cost Private Cost Private Cost-Social Cost Q 800 Is this a positive or negative externality? [Select] What will be the equilibrium price and quantity in this market? Select] What is the socially optimal (efficient) price and quantity for this market? [Select]

explain using the diagram why a negative externality leads to a market failur. how can the Government fix the problem created by a negative externality?

The table below shows cost data for producing different amounts of oil. The market for oil produces negative externalities in the form of pollution and environmental damage. ITTT Price Demand Private Supply Private+Social Supply 4 55 40 10 12 50 50 20 20 45 60 30 28 40 70 40 36 35 80 50 How many barrels of oil will be produced by the free market? What is the socially optimal output of oil?

Price, Cost P4 Ps P₂ P₁ Q₂ Q₁ Quantity Refer to figure above. If a negative externality exists, then the external costs associated with the negative externality equal the distance between points and the socially optimal output is D and B; Q1 B and D; Q2 A and B; Q2 Cand B; Q2

Consider a market with the following supply and demand.  (It may help to draw a graph for these questions.) P            5            6            7            8            9            10            11            12           13           14 QS        200       300        400       500        600        700         800          900        1000       1100 QD       800       750        700       650        600        550         500          450         400         350 If there is an external cost of $3, what is the efficient quantity? If there is an external benefit of $3, what is the efficient quantity? For the remaining questions assume that there is a $3 external COST. If the government wants to get the efficient quantity with a per/unit tax, how much should the tax be? Now imagine that they use tradable allowances.  If they cap the quantity at 400 what would the value of these allowance be in the market?  (Assume the market is perfectly competitive and that "one allowance" lets you…

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Question Completion Status: The market below has an externality. Which area represents the total cost or benefit of the externality if Qo units are produced and consumed? A H D. MSB Q (If you can't see the graph or want to see a larger version then click here.) O C+E Он O F+G O A+B+D

Can you answer this?

Price $40 Marginal Social Cost $36 $32 Supply/ Marginal Private Cost $28 $24 $20 $16 $12 $8 $4 Demand 10 20 30 40 50 60 70 80 90 Quantity 1) Does the above diagram depict a positive externality or a negative externality? 2) What is the market quantity and price? 3) What is the socially optimal quantity? 4) What is the socially optimal price? 5) At the socially optimal price and quantity, what is the consumer surplus? 6) At the socially optimal price and quantity, what is the producer surplus? Remember, producers care about their private costs.| Next, suppose that the government steps in to mandate the socially optimal quantity, but does not allow the price to rise. 7) What is the consumer surplus? 8) What is the producer surplus?

Refer to the table below, which describes the market for cigarettes in terms of marginal benefits, private marginal costs, and private+social marginal costs. Marginal benefits Private marginal costs Private + social marginal costs $8 $12 $4 $10 $6 $10 $12 $8 $8 $6 $10 $14 $4 $12 $16 Calculate the equilibrium quantity of cigarettes that would be produced and sold if society incorporated the negative externalities of cigarettes by taxing cigarettes. Type your answer... Quantity 100 200 300 400 500 Previous DE O 2º W 3 E a Q $ 4 R % 5 ♫ JMA T A 6 MacBook Pro Y & 7 W D U 8 P 1+ I S ( 9 cricut O 0 P 13 { ( Next O