Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 4, Problem 7DQ
To determine
The positive externality and subsidy.
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Students have asked these similar questions
The diagram below gives information about demand and supply for robots in Econtand.
14
12
11
10
$ 9
6.
0 12 345 67 8 9 10
Suppose that each robot in Econland creates a S6 positive externality because of how they make neighborhoods safer. If the
government imposes the Pigouvian policy (the tax e
total surplus as a result of this policy?
subsidy that will maximize total surplus), what would be the change in
O $9
O +$9
O $18
O no change in total surplus from this policy
O +$18
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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
The accompanying diagram shows the supply and demand diagrams
for the competitive market for honey in one region. MC represents
private marginal cost and MB represents private marginal benefit.
Assume there are two types of firms in this region-beekeepers that
produce honey and orchard keepers that produce peaches. The bees
provide a benefit to the orchard keepers by pollinating their peach
trees.
If the external marginal benefit is $2 per unit of honey, then what is the
allocatively efficient output?
O A. 20 kg
B. 80 kg
C. 40 kg
D. 100 kg
E. 60 kg
C
Price ($ per kg)
12
11
10
8
20
MC2
MB
40 :60 :80
S=MCO
MC₁
MB₂
D=MBO
100
Quantity (kg of honey per month)
Chapter 4 Solutions
Microeconomics
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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