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- Are negative externalities considered on a microeconomics analysis? Why or why not?The graph below depicts a schedule of two individual marginal benefit curves (MB1 and MB2) as well as the social marginal benefit (SMB) curve. This good is non-rival in consumption and non- excludable in use, so the SMB was constructed using vertical summation of individual MB curves. Which of the following are TRUE? $20 $15 $13 a b d e Q1 Q2 Q3 SMB MB2 MBI Quantity O b. If the social marginal cost is $20 per unit, then Q2 is the output level that maximizes social net benefit. O e. None of the above are true. O d. Only b and care true OC. The social marginal benefit of the Q1st unit is $28. O a. It must be the case that Q1+02-03,When determining the number of public goods to produce, government must analyze the Marginal Social Benefit (MSB) and Marginal Social Cost (MSC) of each good so they can carefully choose the optimal number of goods to produce in order to Maximize the benefit to society. Answer the questions below about MSB and MSC. Then use the table below the questions to find the number of parks that the government should produce based on the information provided. You will need to complete the table to answer the questions. For questions 4-6 remember to use The Rational Rule to determine the answer to "how many" parks. 2. Define MSB 3. Define MSC 4. How many public parks will be built in this town? 5. If the MSC of each public park decrease to $300, what will be the change in the number of public parks built in this town be? 6. Now assume the social benefit gained with each public park is cut in half. As a social cost of $300 per park, how many public parks will be built in this town? Explain. Total…
- The following graph represents the market for high-emissions cars. Answer this question assuming that the externality is not internalised. In the stylised model, what is the cost of pollution per high-emission vehicle purchased by buyers equal to?Suppose MAC = 40 - 2E and MD = 2E. Draw a graph to show and calculate the following: a) What is the social net benefit of pollution abatement at e*? b) What is the social net benefit of pollution abatement with no pollution control? c) What is the social net benefit of pollution abatement with zero pollution? d) If the actual emission level is 15, what are the total social benefit, total social cost, and net social benefit of pollution abatement? Compared with the efficient level, what is the deadweight loss (in terms of missing net social benefit)?Q.3. Externalities I Perhaps ironically, air conditioners produce heat as a waste product (to say nothing of any externalities from energy consumption). Air conditioner’s waste warm up nearby outdoor areas. This effect can be substantial in dense cities. Suppose that the following are the benefits/ costs from running an air conditioner on a 90 degree day (Q is the temperature reduction enjoyed by the consumer of the air conditioning): MPB=MSB=30-Q MPC=10 External Cost=5 a) Graph the private/social marginal benefit/cost curves described above. b) Determine the market equilibrium consumption of Q. c) Determine the socially optimal consumption level of Q. d) Calculate the consumer/producer surplus in b) and c). Calculate the deadweight loss in each, if applicable. e) What is the deal with producer surplus? f) Determine the tax that will yield the socially optimal consumption level. What is the revenue generated by the tax?
- Consider the global market for carbon dioxide. how would you Explain the economic theories of intertemporal choice, choice under uncertainty, and externalities help in understanding this market and its welfare consequences, as well as the challenges one encounters when trying to apply such theories to this context?can an external demand be met by an economy whose technology matrix is the identity matrix? Explain. Include in your explanation what the practical meaning of a technology matrix that is given by the identity matrix.Explain which of the following cases are classified as (A, B, C, or D) : (A) Negative Externality of Production or (B) Negative Externality of Consumption or (C) Positive Externality of Production or (D) Positive Externality of Consumption: Almawassi village does not have a public fire department, some homeowners purchased private fire protection services to provide a positive externality to neighboring properties, which are less at risk of the protected neighbor's fire spreading to their (unprotected) house. Wakefulness due to a neighbor listening to loud music late at night. a person smoked heavily in a public place. A farmer who uses pesticides to produce vegetables A person planted ornamental trees along Salahiddeen street Creative laboratories which try to find vaccine for COVID 19 The corporate development of some free software to benefit students A software company that creates social media programs No. 2 3 4 5 6 7 8 Answer
- QUESTION 16 16. Entering patient health care data into a database accessible to health care professionals across the medical profession and a wide region increases the ability to apply artificial intelligence to diagnostics and treatment of diseases. This is an example of a) Negative consumption externality. b) Positive consumption externality. c) Negative production externality. d) Positive production externality. QUESTION 17 17. Which of the following is an example of a negative consumption externality? a) water pollution impact of a paper plant b) honey production and pollination of fruit trees c) second-hand smoke d) vaccination against a communicable disease e) none of the above15. Suppose a gated housing community includes 150 identical households. It is costly to maintain the roads in the gated community. Suppose each household has a marginal benefit MB = 200 – 25M for each mile of road maintained. The total cost of maintaining roads is given by C = 20000M (MC=20000). i. If the residents have to pay individually to maintain the roads in the vicinity of their property, how many miles of roads will each household choose to maintain on their own? j. How many miles of roads should be maintained for the community considering the public good nature of roads? k. Suppose the community association could charge a flat fee to the households to fund the maintenance of the roads. How much should this fee be per household and what is the total cost of maintaining the socially efficient level of this public good? 1. Draw the individual marginal benefit curves, overall marginal benefit and the marginal cost curve. Identify and calculate the net social benefit of the public…B.2 a) Street lighting is often described as a 'public good'. In terms of economics, what does the term public good mean in this context? b) In what way do digital information goods differ from public goods? c) Under what circumstances might a profit making company make a public good? Give two examples of business models that companies in this line of business use to produce and deliver public goods whilst still adhering to the definition in a).