Which of these is a negative production externality? An airline manufacturer must hold up production of a plane at great cost due to delays in its global supply chain. O A cereal manufacturer suffers losses due to a drought and unexpected increases in market prices of grains that it uses in its cereals. O Consumers complain to the wrong regulators about price gouging in gasoline markets. A producer of lead for batteries that are used nationwide emits noxious gases in its factory town and local people are getting sick.

Which of these is a negative production externality? An airline manufacturer must hold up production of a plane at great cost due to delays in its global supply chain. O A cereal manufacturer suffers losses due to a drought and unexpected increases in market prices of grains that it uses in its cereals. O Consumers complain to the wrong regulators about price gouging in gasoline markets. A producer of lead for batteries that are used nationwide emits noxious gases in its factory town and local people are getting sick.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Considermarketforagoodcharacterizedbythefollowinginverse demand and supply functions: PX = 10 − 2QX and PX = 2 + 2QX.a. Compute the surplus received by consumers and producers.b. Now suppose all manufacturers of this good are to pay a lump tax of $0.10that will be used by the government regulators to defray some of the environmental cost imposed by this good’s production. What will be the new surplus received by consumers and producers?c. Based on your results in part ‘b’ above, how will you evaluate the impact of this tax policy on the society? Explain
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Researchers have accurately estimated the marginal external cost created by water pollution from a paper mill. The pollution from the mill can be measured. Which policy would achieve the optimal level of pollution reduction at the lowest cost to society? O A system of marketable permits with the level set at one third of current emissions A command-and-control policy that requires the mill to reduce pollution by one half O A requirement to use inputs that create less pollution O A pollution charge equal to the marginal external cost of pollution
Crying babies on an airplane impose a negative externality on those sitting around them.The airline can force the parents of the babies to internalize the cost by Select one: O a. Charging a higher ticket fee for babies and young children. O b. imposing a minimum flying age of 5 years old. O c. evenly dispersing the babies and young children throughout the plane. O d. seating all parents, babies and young children in the same section of the plane. O e. providing discount tickets for babies and young children. Next page ge n this page
Which of the following describes the type of entry barrier faced for municipal sewage services? O A. There is a natural entry barrier for municipal sewage services because it is cheaper to have only one sewer system serving a given region. B. There is a natural entry barrier for municipal sewage services because entry into the market has been limited by government restriction. C. There is a created entry barrier for municipal sewage services because entry into the market has been limited by the economies of scale. D. There is a created entry barrier for municipal sewage services because it is cheaper to have only one sewer system serving a given region.
If it's possible to eliminate the problems created by externalities, why do they persist? Multiple Choice O O None of these statements is true. Correcting externalities would always reduce total surplus. It is difficult to measure external benefits and costs. The benefits of correcting the externalities generally exceed the costs.
Consider a market with free entry and exit where all fırms are identical and have the following TVC schedule and a fixed cost of 32. 2 4 6 8 9 10 TVC 12 20 24 28 34 42 52 64 78 94 And let demand for this good be given by the following schedule. P 4 6 8 10 12 14 16 18 20 QD 1700 1600 1500 1400 1300 1200 1100 1000 900 800 a. Now assume that the production of this good comes with an external cost of $4. On a graph show the supply, demand and marginal social cost for this good in the long run. Also indicate the efficient quantity and the dead weight loss. b. Considering that the equilibrium quantity is no longer efficient, what would be the efficient way to change it: changing the number of firms or having each firm produce a different quantity? c. What policy would result in the market producing the efficient quantity? I have a specific policy in mind here which is mentioned in the book. Assume that policy makers don't know the efficient quantity and can't just order everyone to do the…
Which activity generates a negative externality? O The only two hardware stores in town agree to form a cartel and fix prices. O You buy a neA Lexus and then discover it needs a new alternator. O After Judith buys life insurance, she begins skydiving classes on the weckends. O Your neighbor starts his noisy construction project at 6:00 a.m. on weekends.
A negative externality will cause a private market to produce Select one: a. less than is socially desirable. O b. more than is socially desirable. c. less than the same market would produce in the presence of a positive externality. O d. exactly the quantity that is socially desirable.
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He leit 0: Suppose legislation is passed to force an industry to internalize a cost that was previously an externality, price will (rise, fall) and the quantity produced will (rise, fall). Select one: O a. fall; rise. Ob. rise; fall. O c. fall; fall. O d. rise; rise. Next page search II
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