Microeconomics (13th Edition)
13th Edition
ISBN: 9780134744476
Author: Michael Parkin
Publisher: PEARSON
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Question
Chapter 17, Problem 6SPA
To determine
Price and quantity of tuna.
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1. The prairie dog has always been considered a problem for American cattle ranchers. They dig holes
that cattle and horses can step in, and they eat grass necessary for cattle. Recently, ranchers have
discovered that there is a demand for prairie dogs as pets. In some areas, prairie dogs can sell for as
high as $150 each. Cattlemen are now fencing off prairie dog towns on their land so these towns
will not be disturbed by their cattle.
Draw a rancher's production possibilities frontier showing increasing opportunity cost of cattle
production in terms of prairie dog production. Using a separate graph for each situation, show what
would happen to the initial production possibilities frontier in each of the following situations:
a. The outcome is efficient, with ranchers choosing to produce equal numbers of
cattle and prairie dogs.
b. As a protest against the government introducing the gray wolf back into the
wild in their state, ranchers decide to withhold 25 percent of the available…
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.
close substitute for ocean-fished cod.
The graph below shows the market for farm-raised halibut. Initially, the market is in equilibrium at a price of $8 and a quantity of 6
thousand pounds.
a. Overfishing in the cod market will influence the market for farm-raised halibut by:
decreasing supply to S2 and raising the market price.
increasing demand to D2 and increasing the market price.
O increasing supply to $3 and lowering the market price.
O decreasing demand to D3 and decreasing the market price.
b. A fast-food chain purchases cod for use in its Fish 'n' Chips meals. Already hurt by the reduced supply of cod, the fast-food chain
has lobbied aggressively for price controls on farmed halibut. As a result, Congress has considered imposing a price ceiling on halibut
at the former equilibrium price-the price that prevailed before overfishing reduced the supply of cod ($8 per pound).
Suppose Congress adopts the price control policy, which sets the price at $8 per pound. On the graph…
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
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