Microeconomics (13th Edition)
13th Edition
ISBN: 9780134744476
Author: Michael Parkin
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 17, Problem 26APA
To determine
Efficient quantity of student.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Use the table below to answer the questions:
Quantity
Supplied (Private Supplied (Social
Cost only)
12,000
14,000
17,000
20,000
24,000
Quantity
Quantity
Demanded
Price
19,000
14,000
9000
5000
1000
$50
$55
$60
$65
$70
Cost)
6000
7500
9000
11,000
14,000
(a) Find the equilibrium price, assuming sellers ignore negative externalities.
(b) Find the equilibrium quantity, assuming sellers ignore negative externalities.
(c) Find the optimal price, including external costs.
(d) Find the optimal quantity, including external costs.
I
Price and cost (thousands of dollars per student)
20
16
12
8
0
200
A) 0 students; 400 students
B) 600 students; 600 students
C) 400 students; 600 students
D) 600 students; 400 students
E) 400 students; 400 students
S = MC
MSB
MB
400 600 800 1,000
Quantity (students per year)
35)
35) The figure above shows the market for private elementary school education in Chicago. There is
no external cost of private elementary education. If the government does not intervene in this
market, the equilibrium number of students being privately educated is
and the
efficient quantity is
Paragraph
Styles
ILOS: A2, C2
Editing
Voice
4. The paper industry has the demand and supply curves shown below:
Price of paper
Quantity demanded
Quantity supplied
80
40
70
50
4
60
60
50
70
a. Suppose that this industry results in extreme externalities. What can be
said about its optimal output?
b. Draw the supply and demand curves for paper. Does the supply curve
reflect the true social costs of producing the product? If not will a supply
curve reflecting the true social costs lies above or below the supply curve
you have drawn?
c. What is the equilibrium price of paper? From the point of view of
reflecting the true social costs, is this price the correct one, or too low or
too high?
Chapter 17 Solutions
Microeconomics (13th Edition)
Ch. 17.1 - Prob. 1RQCh. 17.1 - Prob. 2RQCh. 17.2 - Prob. 1RQCh. 17.2 - Prob. 2RQCh. 17.2 - Prob. 3RQCh. 17.2 - Prob. 4RQCh. 17.3 - Prob. 1RQCh. 17.3 - Prob. 2RQCh. 17.3 - Prob. 3RQCh. 17.4 - Prob. 1RQ
Ch. 17.4 - Prob. 2RQCh. 17.4 - Prob. 3RQCh. 17.4 - Prob. 4RQCh. 17 - Prob. 1SPACh. 17 - Prob. 2SPACh. 17 - Prob. 3SPACh. 17 - Prob. 4SPACh. 17 - Prob. 5SPACh. 17 - Prob. 6SPACh. 17 - Prob. 7SPACh. 17 - Prob. 8SPACh. 17 - Prob. 9SPACh. 17 - Prob. 10APACh. 17 - Prob. 11APACh. 17 - Prob. 12APACh. 17 - Prob. 13APACh. 17 - Prob. 14APACh. 17 - Prob. 15APACh. 17 - Prob. 16APACh. 17 - Prob. 17APACh. 17 - Prob. 18APACh. 17 - Prob. 19APACh. 17 - Prob. 20APACh. 17 - Prob. 21APACh. 17 - Prob. 22APACh. 17 - Prob. 23APACh. 17 - Prob. 24APACh. 17 - Prob. 25APACh. 17 - Prob. 26APACh. 17 - Prob. 27APACh. 17 - Prob. 28APACh. 17 - Prob. 29APACh. 17 - Prob. 30APA
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- price 100 90 MPC-MSC 80 70 30,67.5 60 40,60) 50 30,45) 40 40,37.5) MSB 30 20 10 MPB 10 20 30 40 50 60 70 80 90 100 quantity of trees (thousands) Trees planted in urban areas improve air quality, reduce soil erosion, and moderate temperatures in hot cities. The figure depicts the market for trees planted in Tempe, Arizona. What is the value of the deadweight loss if the market is unregulated? To review this concept, see the section Positive Externalities. 100 50 225 112.5arrow_forwardPrice Ssocial Sinternal $7.00 $6.00 $5.00 D $4.00 Dinternal 3,000 3,500 Quantity externality. In the market shown in the diagram above, there is a Select one: a. negative production b. negative consumption c. positive production d. positive consumptionarrow_forwardThis graph represents the tobacco industry. IPrice 16 14 Social Cost 12 10 Private Cost 8 6 4 Demand 200 500 650 Quantity a) Without any government intervention, what is the market determined price and quantity? b) What is the price of the externality? c) What is the socially optimal price and quantity? d) What should the government do (impose a tax or provide a subsidy) to internalize this externality? What is the amount of the the corrective tax/subsidy needed to be to move the outcome from the market equilibrium to the socially-optimal outcome?arrow_forward
- Identify at least one positive and negative externality from running a hamburger shop. What is one example of how an externality could affect the price of your hamburger?arrow_forwardDefine the concept of a negative externality and explain the nature of the negative externality in the fishing markets i.e. describe how the self-interested actions of a fishing company might adversely affect third parties without their consent.arrow_forwardHow market equilibrium is found with Pollution Abatement Subsidy? Also draw graph and interpret it.arrow_forward
- Externalities Application-no credit given for answers based outside of course sources Part 2 (16 pts): Use the graph below to answer the questions on the next slide. Price $120 $80 Seher City D S 0 160 320 Quantity of potatoes 5arrow_forward$15 $12 $8 28 Select one: a. $7 b. $3 500 700 C. $4 d. $15 Supply Social value Demand The figure above shows a market for Softella medicated tissues. Assume the only use for the tissues is to wipe and clean your hands, which prevents the spread of germs to others. If the government were to subsidize the users of the tissues, what would be the dollar amount of the subsidy? Quantity of boxes of so ftella medicated tissuesarrow_forwardUse the graph attached below as a starting point (either download it or print it out). Add curves, labels, etc. to this graph in order to show the following: 1. Show that this good has a $4/unit negative externality (external cost), such as pollution. 2. Shade the area that represents the Deadweight Loss (lost gains from trade) caused by the external cost. 3. Show a tax or subsidy wedge (whichever you think is appropriate) that will solve the problem of the external cost. 4. Show the socially optimal level of production that the Pigouvian tax or subsidy above will help the market to achieve. You may use software or pencil and paper to complete this graph. Upload it here when you are done.arrow_forward
- The following data refers to the number of logging operations working in a stretch of tropical rainforest per week. Excluding externalities, the private cost of a logging operation is $25 thousand per week. Logs sell for $1 a piece. Fill in the chart below. # of operations total harvest average harvest average revenue marginal harvest marginal revenue marginal profit 0 0 1 40 2 75 3 105 4 130 5 150 6 165 7 175 8 180 What is the number of logging operations in the forest that maximizes total profit? How much total resource rent is generated at this level of harvest? With open access to the forest, how many folks will wind up logging? With open access, will there be any resource rent earned by the loggers? Suppose the total externalities associated with deforestation could be valued at $10,000 per operation. What is the efficient number of operators? What is the open…arrow_forwardSome economists claim that early child care generates an external benefit to society. Use the below graph to answer the following questions. Price ($ per month) Supply 1,300 1,200 1,000 900 Marginal Social Benefit 1. Marginal Private Benefit 23 26 Quantity (millions per month) What is the market equilibrium? What is the socially optimal outcome? How do they differ? a. b. The government is planning to provide a per-unit subsidy for child care to achieve the socially optimal outcome. How large should this subsidy be? с. How much is the total government subsidy each month to reach a socially optimal outcome?arrow_forwardLet the supply and demand for widgets be given by the following schedule. Price: 3, 4, 5, 6, 7, 8, 9, 10, 11 Quantity Supplied: 100, 200, 300, 400, 500, 600, 700, 800, 900 Quantity Demanded: 900, 800, 700, 600, 500, 400, 300, 200, 100 a. What quantity will be produced here? b. What quantity is efficient if there are no external costs or benefits? c. What quantity is efficient if there is an external cost of $6 per unit from pollution caused by the widget factories?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of MicroeconomicsEconomicsISBN:9781305156050Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Microeconomics
Economics
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:Cengage Learning
What is Efficiency?; Author: Marketing Business Network;https://www.youtube.com/watch?v=HtyE1V6jXek;License: Standard Youtube License