Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
20th Edition
ISBN: 9780078021756
Author: McConnell, Campbell R.; Brue, Stanley L.; Flynn Dr., Sean Masaki
Publisher: McGraw-Hill Education
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Question
Chapter 4, Problem 6P
To determine
The optimal quantity of public good.
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Refer to the above supply and demand graph of Product X.
Q,
Quantity of Product X
What would happen if the government taxed the producers of this product because
it has negative externalities in production?
O 1) Supply would increase.
2) Demand would decrease.
O 3) Price would decrease.
4) Supply would decrease.
Price
PRICE (Dollars per unit of electric cars)
500
450
400
350
300
250
200
150
100
50
0
H
0
O
□
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0
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The market equilibrium quantity is
O
3
5
QUANTITY (Units of electric cars)
☐ Supply
(Private Cost)
6
Demand
(Private Value)
Social Cost
units of electric cars, but the socially optimal quantity of electric car production is
To create an incentive for the firm to produce the socially optimal quantity of electric cars, the government could impose a
per unit of electric cars.
units.
of 1
The graph shows the marginal social cost, supply, and demand curves in the hand sanitizer market. At what quantity could
the government set a quota to control this externality?
O 12
4
8.
Chapter 4 Solutions
Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
Ch. 4.A - Prob. 1ADQCh. 4.A - Prob. 2ADQCh. 4.A - Prob. 3ADQCh. 4.A - Prob. 1ARQCh. 4.A - Prob. 2ARQCh. 4.A - Prob. 3ARQCh. 4.A - Prob. 1APCh. 4 - Prob. 1DQCh. 4 - Prob. 2DQCh. 4 - Prob. 3DQ
Ch. 4 - Prob. 4DQCh. 4 - Prob. 5DQCh. 4 - Prob. 6DQCh. 4 - Prob. 7DQCh. 4 - Prob. 8DQCh. 4 - Prob. 9DQCh. 4 - Prob. 1RQCh. 4 - Prob. 2RQCh. 4 - Prob. 3RQCh. 4 - Prob. 4RQCh. 4 - Prob. 5RQCh. 4 - Prob. 6RQCh. 4 - Prob. 7RQCh. 4 - Prob. 1PCh. 4 - Prob. 2PCh. 4 - Prob. 3PCh. 4 - Prob. 4PCh. 4 - Prob. 5PCh. 4 - Prob. 6PCh. 4 - Prob. 7P
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- Question 22 Let Q be quantity of beer (in packs) consumed in the US. Assume beer consumption imposes a negative externality of $30 per pack. The private demand for beer is P=150-2Q while the private supply curve is P=Q. If the government impose a $30 tax per pack what is the change in total surplus from before to after the imposition of the tax. -$150 beer, $150 O $1.350 o 51,350arrow_forwardPrice at a ~ a X b a Q₂ Q3 Q4 Collective quantity demanded and supplied 0 S Refer to the above supply and demand graph for a public good. Assume that the economy currently produces this public good at a quantity Q 3. Based on this information we can conclude that the: O a. total benefit of this public good is less O b. total benefit of this public good is greater than the total cost, so society should than the total cost, so society should produce less of the good. produce more of the good. O c. marginal benefit of this public good is greater than the marginal cost, so society should produce less of the good. O d. marginal benefit of this public good is less than the marginal cost, so society should produce less of the good.arrow_forwardRefer to Figure 11-1. If the external cost of producing the good is not taken into account, what is the deadweight loss in the market? Figure 11-1. Price O O 8 7 5 0 $2 $4 $5 $10 $15 8 10 15 17 O C2 C1 Quantityarrow_forward
- P = 16-.25Q MC = 2 + .25Q Production creates an external benefit equal to $2 per unit. What price and quantity maximize profit in this market? O28, $10 28, $9 O 24, $9 O 24, $10arrow_forwardThe many identical residents of some cities love drinking apple juice. The cost of producing a bottle of apple juice is $5, and the competitive suppliers sell it at this price. Each resident has the following willingness to pay for the tasty refreshment: Quantity Willingness to Pay (Dollars) First bottle 10 Second bottle 8 Third bottle 6. Fourth bottle 4 Fifth bottle 2 Further bottlesarrow_forward3) The town of Boone has asked you to estimate the total consumer surplus of swimming trips to their outdoor pool. They charge $5 for entry and get an annual attendance of 100,000 visitors. This is the only data point we know. However, Blowing Rock also have an outdoor pool. They charge $7.50 for entry and get an annual attendance of 75,000 visitors. Assuming that we can also use the Blowing Rock data as an analogous private-sector good, map out the demand curve for swimming trips to the Boone pool below. What is the annual consumer surplus for swimming trips to the Boone pool?arrow_forward
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