EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Question
Chapter 16, Problem 16.7P
a
To determine
Optimum level of activity
b)
To determine
Output produced by private market.
c)
To determine
Optimal output produced and cost if government produces it. Tax allocation to individuals.
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If 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?
19.6
Suppose there are only two individuals in society. Person A’s demand curve for mosquito control is given by
qa = 100- pfor person B, the demand curve for mosquito control is
given by
qb= 200-p
Suppose mosquito control is a pure public good; that is, once it is produced, everyone benefits from it. What would be the optimal level of this activity if it could be produced at a constant marginal cost of $120 per unit?
If mosquito control were left to the private market, how much might be produced? Does your answer depend on what each person assumes the other will do?
If the government were to produce the optimal amount of mosquito control, how much will this cost? How should the tax bill for this amount be allocated between the individuals if they are to share it in proportion to benefits received from mosquito control?
There are two consumers of mosquito abatement (a public good), Dave and Lilly. Dave’s benefit from mosquito abatement is given by ??? = 100 − ?, where Q is the quantity of mosquito abatement. Lilly’s benefit is given by ??? = 60 − ?.a. Calculate the total marginal benefit, ???.b. Suppose that mosquito abatement can be provided at a marginal cost of ?? = 2?. Find the socially optimal level of abatement.
c. If mosquito abatement is privately supplied, what quantity will be supplied by Dave, and what quantity will be supplied by Lilly? Briefly explain.
Chapter 16 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 16.2 - Prob. 1TTACh. 16.2 - Prob. 2TTACh. 16.2 - Prob. 1MQCh. 16.3 - Prob. 1MQCh. 16.3 - Prob. 2MQCh. 16.3 - Prob. 1TTACh. 16.3 - Prob. 2TTACh. 16.4 - Prob. 1MQCh. 16.4 - Prob. 2MQCh. 16.7 - Prob. 1MQ
Ch. 16.7 - Prob. 2MQCh. 16.8 - Prob. 1TTACh. 16.8 - Prob. 2TTACh. 16.8 - Prob. 1.1TTACh. 16.8 - Prob. 2.1TTACh. 16 - Prob. 1RQCh. 16 - Prob. 2RQCh. 16 - Prob. 3RQCh. 16 - Prob. 4RQCh. 16 - Prob. 5RQCh. 16 - Prob. 6RQCh. 16 - Prob. 7RQCh. 16 - Prob. 8RQCh. 16 - Prob. 9RQCh. 16 - Prob. 10RQCh. 16 - Prob. 16.1PCh. 16 - Prob. 16.2PCh. 16 - Prob. 16.3PCh. 16 - Prob. 16.4PCh. 16 - Prob. 16.5PCh. 16 - Prob. 16.6PCh. 16 - Prob. 16.7PCh. 16 - Prob. 16.8PCh. 16 - Prob. 16.9PCh. 16 - Prob. 16.10P
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