Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Chapter 14, Problem 3SQP
To determine
Impact of radiation as an externality in housing prices.
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Suppose that you put an invisible tracking device on your computer that will instantly lead police to it if your computer is ever stolen. Does your purchase of the tracking device provide a positive or negative externality? What kind of externality do you provide when you purchase a visible computer lock in order to prevent theft?
Historically, Vaccinations have prevented the spread of certain diseases such as chicken pox or megningtis. What type of externality takes place with the consumption of such vaccines. Explain with words and a graph.
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Chapter 14 Solutions
Micro Economics For Today
Ch. 14.2 - Prob. 1.1GECh. 14.2 - Prob. 1.2GECh. 14.2 - Prob. 1.3GECh. 14.2 - Prob. 2.1GECh. 14.2 - Prob. 2.2GECh. 14.2 - Prob. 2.3GECh. 14.2 - Prob. 2.4GECh. 14 - Prob. 1SQPCh. 14 - Prob. 2SQPCh. 14 - Prob. 3SQP
Ch. 14 - Prob. 4SQPCh. 14 - Prob. 5SQPCh. 14 - Prob. 6SQPCh. 14 - Prob. 7SQPCh. 14 - California once proposed legislation that would...Ch. 14 - Prob. 9SQPCh. 14 - Prob. 10SQPCh. 14 - Prob. 11SQPCh. 14 - Prob. 12SQPCh. 14 - Prob. 13SQPCh. 14 - Prob. 14SQPCh. 14 - Prob. 15SQPCh. 14 - Prob. 16SQPCh. 14 - Prob. 1SQCh. 14 - Prob. 2SQCh. 14 - Prob. 3SQCh. 14 - Prob. 4SQCh. 14 - The perfectly competitive profit-maximizing firm...Ch. 14 - Prob. 6SQCh. 14 - Prob. 7SQCh. 14 - Prob. 8SQCh. 14 - Prob. 9SQCh. 14 - Prob. 10SQCh. 14 - Prob. 11SQCh. 14 - Prob. 12SQCh. 14 - Prob. 13SQCh. 14 - Prob. 14SQCh. 14 - Prob. 15SQCh. 14 - Prob. 16SQCh. 14 - Prob. 17SQCh. 14 - Prob. 18SQCh. 14 - Prob. 19SQCh. 14 - Prob. 20SQ
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- Suppose that we have a model that estimates that taking the COVID-19 vaccine creates a positive externality to society that is at least equal to $1500 per vaccine. (Amazing, right? Well, remember that I made it up.) This means that for every person that takes the vaccine, the benefits to society will be $1500 or more. a. First, what factors do you think go into estimating the benefits of $1500 per vaccine. This is kind of a brainstorming question – but it is worth points so don’t skip it. b. What is the relationship between the equilibrium quantity of vaccines and the socially optimal quantity of vaccines?arrow_forwardThere is a road between the suburbs and downtown. The road is congested at rush hour, so each. additional driver slows all of the other drivers down. In this question, we will calculate the cost of this negative externality. For simplicity, ignore all of the costs of using the road other than the cost of time. Assume that people value their time at $6 per hour (that is, $0.10 per minute). If 121 people use the road at rush hour, the trip takes 37 minutes. If one additional person enters the road, everyone would have to slow down and the trip would take one more minute for everyone. What is the monetary value of the time-loss that the additional driver imposes on the other drivers already on the road? * (Round your response to 1 decimal place, and do not include a dollar sign.)arrow_forwardCan an activity generate both positive and negative externalities at the same time? Explain your answer.arrow_forward
- In which way could smoking exert a positive externality on others?arrow_forwardIf the government subsidizes vaccination against influenza to internalize the externality, should it impose the subsidy on consumers or producers of flu vaccines? How large should the subsidy be? How much less per flu vaccine would patients (i.e., consumers) pay? How much more would manufacturers (i.e., producers) of flu vaccines receive?arrow_forwardSuppose wearing face masks during the coronavirus pandemic leads to positive externalities, given that persons you come into contact with are less likely to contract the virus. If so, then, absent government subsidies, the number of persons wearing face masks will be greater than the optimal level from society's point of view the number of persons wearing face masks will be below the optimal level from society's point of view more people will want to wear face masks because external benefits tend to play a role in private decisions, such as whether to wear a face mask the number of persons wearing face masks will be optimal from society's point of viewarrow_forward
- With rental rates exceeding $3,000 per square foot per year, retail space in Causeway Bay, Hong Kong, is among the world's most expensive. In 2011, the Town Planning Board limited the height of future buildings in the area to between 130 and 200 meters. Real estate developer Hysan Group, which owns nine properties in the area, asked the Board to relax the limits, but the Board denied the application. What externality does the height restriction resolve? How would the Hysan Group benefit from relaxing the height restrictions? Should the restrictions on height be the same throughout Hong Kong?arrow_forwardDo COVID-19 Vaccines create external benefit? Why? Then should the government subsidize this activity?arrow_forwardAn example of an externality is:a) the irritation you feel when you drive past a gas station offering a 20% discount on gas, having just filled your tank for full price at a station 100 meters up to the roadb) the penalty paid by a coal mining company after it is caught illegally dumping toxic waste into a riverc) the injury suffered by a cyclist who, in your delirious rage over missing the bargain at the gas station, you inadvertently force off the road as you drive past the gas stationd) the price paid by an electricity company for an emission certificate on the European Trading Scheme, allowing it to emit a specified level of CO2arrow_forward
- Consider the market for flu vaccines, in which consumption causes positive externalities by creating herd immunity. Quantity supplied is given by Qs=2+2*P Marginal Private Benefit (determines individual demand of consumers of the vaccine i.e. the benefit from not getting sick) is given by Qd=60.5-2.5*MBP. Marginal Social Costs (MPC plus the benefits of externalities) is given by Qd=69.5-2.5*MSB. Plot these 3 curves on a graph with 6 points at P=11,12,13,14,15,16. What is the deadweight loss if only free-market forces are at play (i.e. externalities are not considered by the consumers)? How much should the subsidy be to bring the market to efficient equilibrium?arrow_forwardThe market for seasonal flu shots is depicted in the graph. As more people receive flu shots, fewer people catch the flu and there are fewer people to pass the flu along to others. Therefore, the chance of catching the flu decreases for everyone, even those who do not purchase a flu shot. This is an example of a positive externality. The demand curve in the graph measures private marginal benefits, and the supply curve measures the marginal cost of flu shots. The demand curve ignores external benefits of flu shots. Graph the social demand curve by placing the end points of the marginal social benefit curve at the correct locations. Then, shade the dead weight loss to society by placing the DWL triangle in the correct location. The Market for Flu VaccinationsPrice ($)Quantity of flu shotssupplymarginal private benefitmarginal social benefitDWLDWL Based on the graph, which statement about flu vaccines is true? People who get vaccinated primarily consider the health benefits to the…arrow_forward#2. You have two periods. I've given you an externality with MEC=0.05q1. So, MB1=8-0.4q1 MB2=8-0.4q2. So, the externality is a cost realized in period 2 but caused by period 1's production choice. Q1 belongs to the first period, and Q2 is the second.arrow_forward
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