Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Chapter 17, Problem 3SPA
To determine
Quantity of cotton produced and
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K
The graph illustrates the market for cotton
Suppose that the coton growers use a chemical to control insects and waste flows into
the town's river.
The marginal social cost of producing the cotton is double the marginal private cost
If no one owns the river and the two takes no action to control the waste, what is the quantity
of cotton and the deadweight loss created?
CTD
If no one owns the river, the quarsity of cotton produced is 60 tons a month.
The deadweight loss is $month
300-
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40
Price (dollars per ton)
D
16 M
ID
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Quantity (ons par month)
Q
a
G
The graph illustrates the market for cotton.
Suppose that the cotton growers use a chemical to control insects and waste flows
into the town's river.
The marginal social cost of producing the cotton is double the marginal private
cost.
If no one owns the river and the two takes no action to control the waste, what is
the quantity of cotton and the deadweight loss created?
If no one owns the river, the quantity of cotton produced is
tons a month.
150-
125-
100-
75-
50-
25-
0-
0
Price (dollars per ton)
S
D
50 100 150 200 250 300 350 400 450 500
Quantity (tons per month)
Refer to the Figure. This graph represents the market for cigarettes. This market
Price
34
32
30
28
26
24
Social Cost
22
20
Private Cost
18
16
14
12
10
8
4
2
Demand
200
500 600
Quantity
has no externalities.
would benefit from a tax.
would benefit from a subsidy.
has no need for government intervention.
Chapter 17 Solutions
Macroeconomics
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
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