Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Chapter 16.1, Problem 3RQ
To determine
Definepublic good, private good, common resources, and natural
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What do each of the following have in common?
public good
unregulated monopoly
a good with a negative externality
information failure
Multiple Choice
marginal cost will be equal to marginal utility
all are examples of market failures
all of the goods are overproduced
marginal cost will be equal to marginal utility and all are examples of market failures
Differentiate between a public good and common resources.
Based on market research, a film production company in Ectenia obtains the following information
about the demand and production costs of its new DVD:1
Demand: P = 1,000 – 10Q
Marginal Revenue: MR = 1,000 – 20Q
Marginal Cost: MC = 100 + 10Q
a. Find the price and quantity that maximize the company’s profit.
b. Find the price and quantity that would maximize social welfare.
c. Use a graph to illustrate the DWL and calculate the dollar value of the DWL.
Chapter 16 Solutions
Macroeconomics
Ch. 16.1 - Prob. 1RQCh. 16.1 - Prob. 2RQCh. 16.1 - Prob. 3RQCh. 16.1 - Prob. 4RQCh. 16.2 - Prob. 1RQCh. 16.2 - Prob. 2RQCh. 16.2 - Prob. 3RQCh. 16.2 - Prob. 4RQCh. 16.3 - Prob. 1RQCh. 16.3 - Prob. 2RQ
Ch. 16.3 - Prob. 3RQCh. 16.3 - Prob. 4RQCh. 16.3 - Prob. 5RQCh. 16 - Prob. 1SPACh. 16 - Prob. 2SPACh. 16 - Prob. 3SPACh. 16 - Prob. 4SPACh. 16 - Prob. 5SPACh. 16 - Prob. 6SPACh. 16 - Prob. 7SPACh. 16 - Prob. 8SPACh. 16 - Prob. 9SPACh. 16 - The Economics of Healthcare (Study plan 16.3) Use...Ch. 16 - Prob. 11APACh. 16 - Prob. 12APACh. 16 - Prob. 13APACh. 16 - Prob. 14APACh. 16 - Prob. 15APACh. 16 - Prob. 16APACh. 16 - Prob. 17APACh. 16 - Prob. 18APACh. 16 - Prob. 19APACh. 16 - Prob. 20APACh. 16 - Prob. 21APACh. 16 - Prob. 22APACh. 16 - Prob. 23APACh. 16 - Prob. 24APA
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- The creation of knowledge is a public good. Because knowledge is a public good, profit-seeking firms tend to free-ride on the knowledge created by others and, as a result, devote too few resources to the creation of knowledge. How does the U.S. government correct for this apparent market failure?arrow_forwardWhich of these are Rival in Consumption but not Excludable? Private Goods Club Goods Public Goods Common Resourcesarrow_forwardThe United States Supreme Court has stated that the rules that apply to speech carried over the public airwaves must be the same as the rules that apply to speech that is carried in print media, such as newspapers, because there is no significant difference between the two. True or False?arrow_forward
- Define public goodsarrow_forwardThe creation of knowledge is a public good. Because knowledge is a public good, profit-seeking firms tend to free-ride on the knowledge created by others and, as a result, devote too few resources to the creation of knowledge. How does the government correct for this apparent market failure?arrow_forwardHow does social protection, as an area of government spending, both positively and negatively impact a business?arrow_forward
- Identify a newspaper article that illustrates a market failure in Barbados. Ensure that you provide a screenshot of the article in your submission. NOTE: Only the following market failures should be examined: public good, asymmetric information, positive or negative externality. Suggest a relevant government policy that would yield the efficient outcome and carefully explain the process through which the implementation of the government policy will lead to the optimal outcome. How will the imposition of the chosen government policy impact consumersurplus, producer surplus and total surplus in this scenario?arrow_forwardGive an example of a good or service that should not be allocated entirely by a free, unregulated market. Explain your reasoning.arrow_forwardGovernment intervention may: cause a good to become non-excludable. make a market more efficient if a failure is present. make a market more efficient if no failure is exists. cause a good to become non-rival.arrow_forward
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