Economics (7th Edition) (What's New in Economics)
7th Edition
ISBN: 9780134738321
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 5, Problem 5.1.9PA
To determine
Externality that is associated with driving.
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In writing about the increased popularity of national parks in the United States, such as Yosemite, Yellowstone, and
the Grand Canyon, environmental economist Margaret Walls wrote:
When one person's visit to a park doesn't appreciably diminish the experience for others, the fee to use the
park should be zero. That doesn't apply when the public good starts to experience congestion problems...the
Park Service should...[charge] a significantly higher fee at the most popular parks during the summer months.
Source: Margaret A. Walls, "Protecting Our National Parks: Entrance Fees Can Help," Resources, No. 193, Fall 2016.
Are Yosemite and other national parks public goods? Briefly explain.
A. Yes, they are public goods because national parks such as Yosemite are common resources that are often
overused.
B. No, Yosemite and other national parks are not public goods when congestion diminishes others'
enjoyment of them.
C. No, Yosemite and other national parks are not public goods because the…
From CNN what news article represents an issue ragards to Externalities or that can be realted to externalities? Cite at least one source (News Article, Video, etc.) for any data.
Explain:
What is the Economic issue? (Describe the issue)
What is the connection to Externalities? (positive, negative, policy) (Use Math, Graph or data to explain or support your idea)
Explain how this affects the Economy (individual, industry, national or global)
How is the increase in post-secondary education (e.g. positive externality) going to effect consumer behavior in the future?
Chapter 5 Solutions
Economics (7th Edition) (What's New in Economics)
Ch. 5 - Prob. 5.1.1RQCh. 5 - Prob. 5.1.2RQCh. 5 - Prob. 5.1.3RQCh. 5 - Prob. 5.1.4RQCh. 5 - Prob. 5.1.5RQCh. 5 - Prob. 5.1.6PACh. 5 - Prob. 5.1.7PACh. 5 - Prob. 5.1.8PACh. 5 - Prob. 5.1.9PACh. 5 - In a study at a large state university, students...
Ch. 5 - Prob. 5.1.11PACh. 5 - Prob. 5.1.12PACh. 5 - Prob. 5.1.13PACh. 5 - Prob. 5.2.1RQCh. 5 - Prob. 5.2.2RQCh. 5 - Prob. 5.2.3RQCh. 5 - Prob. 5.2.4PACh. 5 - Prob. 5.2.5PACh. 5 - Prob. 5.2.6PACh. 5 - Prob. 5.2.7PACh. 5 - Prob. 5.2.8PACh. 5 - Prob. 5.2.9PACh. 5 - Prob. 5.2.10PACh. 5 - Prob. 5.2.11PACh. 5 - Prob. 5.3.1RQCh. 5 - Prob. 5.3.2RQCh. 5 - Prob. 5.3.3RQCh. 5 - Prob. 5.3.4PACh. 5 - Prob. 5.3.5PACh. 5 - Prob. 5.3.6PACh. 5 - Prob. 5.3.7PACh. 5 - Prob. 5.3.8PACh. 5 - Prob. 5.3.9PACh. 5 - Prob. 5.3.10PACh. 5 - Prob. 5.3.11PACh. 5 - Prob. 5.3.12PACh. 5 - Prob. 5.3.13PACh. 5 - Prob. 5.3.14PACh. 5 - Prob. 5.3.15PACh. 5 - Prob. 5.3.16PACh. 5 - Prob. 5.4.1RQCh. 5 - Prob. 5.4.2RQCh. 5 - Prob. 5.4.3RQCh. 5 - Prob. 5.4.4PACh. 5 - Prob. 5.4.5PACh. 5 - Prob. 5.4.6PACh. 5 - Prob. 5.4.7PACh. 5 - Prob. 5.4.8PACh. 5 - Prob. 5.4.9PACh. 5 - Prob. 5.4.10PACh. 5 - Prob. 5.4.11PACh. 5 - Prob. 5.4.12PACh. 5 - Prob. 5.1CTECh. 5 - Prob. 5.2CTE
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- An externality arises when a firm or person engages in an activity that affects the wellbeing of a third party, yet neither pays nor receives any compensation for that effect. If the impact on the third party is adverse, it is called a externality. The following graph shows the demand and supply curves for a good with this type of externality. The dashed drop lines on the graph reflect the market equilibrium price and quantity for this good. Adjust one or both of the curves to refiect the presence of the externality. If the social cost of producing the good is not equal to the private cost, then you should drag the supply curve to reflect the social costs of producing the good; similarly, if the social value of producing the good is not equal to the private value, then you should drag the demand curve to reflect the social value of consuming the good. -O- Supply Demand Supply Demand QUANTITY (Unts) With this type of externality, in the absence of government intervention, the market…arrow_forwardAn externality arises when a firm or person engages in an activity that affects the wellbeing of a third party, yet neither pays nor receives any compensation for that effect. If the impact on the third party is beneficial, it is called a externality. The following graph shows the demand and supply curves for a good with this type of externality. The dashed drop lines on the graph reflect the market equilibrium price and quantity for this good. Adjust one or both of the curves to reflect the presence of the externality. If the social cost of producing the good is not equal to the private cost, then you should drag the supply curve to reflect the social costs of producing the good; similarly, if the social value of producing the good is not equal to the private value, then you should drag the demand curve to reflect the social value of consuming the good. (?) PRICE (Dollars per unit) QUANTITY (Units) Supply Demand ¦ þ Demand Supplyarrow_forwardECONOMICS Please Show Your Work With an Explanation This problem set explores what happens to pricing when we add network effects, which are a specific form of positive externality. You’ve invented a 3D fax machine. This cool technology is almost like a Star Trek teleporter. You can scan an object at one machine, which creates an exact copy at another 3D fax machine. It is so valuable that as more people use it, it becomes more valuable, and the price any given user is willing to pay increases in turn. Consider a scenario in which there are 12 possible users, who each value the fax machine at i*n, where i is the index of that user (from 1 to 12), and n is the number of other purchasing users. So, if no one buys the 3D fax machine, everyone values it at 0. However, as soon as one person buys the device, then the 12 possible users begin to value the product at 1, 2, … 12, respectively. If 2 people purchase, the 12 possible users’ valuations increase to 2, 4, … 24, and so on. Because…arrow_forward
- Smoking imposes externalities on non-smokers, but non-smokers can also impose externalities on smokers. Is this statement true or false? Why or why not?arrow_forward3:01 2. Indicate whether the following activities create a positive or negative externality: a. Late-night road construction begins on a new bridge. As a consequence, traffic is rerouted past your house while the construction takes place. b. An excavating company pollutes a local stream with acid rock. c. A homeowner whose property backs up on a city park enjoys the sound of kids playing soccer. d. A student uses her cell phone discreetly during class. e. You and your friends volunteer to plant wildflowers along the local highway. ← + 8arrow_forwardBefore Coase's 1960 paper the only real course of action economists prescribed for dealing with externalities (based on the work of A.C. Pigou) was to: Group of answer choices: a. subsidize all goods with externalities. b. tax goods with positive externalities and subsidize goods with negative externalities. c. tax goods with negative externalities and subsidize goods with positive externalities. d. tax all goods with externalities.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_forwardDuring the COVID-19 pandemic, alcohol consumption increased dramatically. In response, the government is considering increasing the tax rate on alcohol. It's known that the demand for alcohol is inelastic, and the supply of alcohol is perfectly elastic. Which of the following statements are true? (Select all that apply.) Question 5Answer a. A tax on alcohol is one way to make consumer internalize the cost of the externalities associated with drinking, such as long-term health implications. b. Regardless of how the tax is implemented, consumers will pay the full amount of the tax. c. It doesn't matter how the tax is implemented. d. Consumers and suppliers will split the burden of the tax. e. The government will collect more revenue if the tax is on the suppliers. f. Alcohol consumption will decrease more in the short-run than in the long-run. g. Alcohol consumption will decrease more in the long-run than in the short-run. h. There are positive…arrow_forwardNegative externalities and fast food Task 6b Explain the concept of negative externalities Point value In no more than 200 words, briefly explain the concept of negative externalities. 4 points Does eating too much fast food generate a negative externality? Why or why not? Format - Evidence of negative externalities | Reflection (written) Point Answer box value Negative externalities and fast food Task 6c | Negative externality: Consuming too much fast food Create two demand and supply diagrams to demonstrate the following: In your first diagram show the negative externality of consuming too much fast food. Carefully label your diagram and identify the deadweight loss. In your second diagram add a tax to this market. Highlight what happens to consumption. In a dot point below your last diagram briefly tell us whether the second diagram has a deadweight loss. Point value 8 points Format - Evidence of negative externality of consuming too much fast food | Reflection (written) Answer box…arrow_forward
- You are about to sign-up for a movie streaming service and are trying todecide how many movies you should subscribe to. Each movie you stream costs $4.00. How many movies should you watch based on the table below, which represents the marginal benefits of streaming a certain amount of movies?Movies Streamed Marginal Benefit1 $7.002 $5.503 $4.504 $3.505 $2.006 $1.50arrow_forwardIf there are no externalities or market power and all markets are in equilibrium, what conclusions can we draw from this in economic theory?arrow_forwardCategorize each of the following five goods as a Private Good, Common Good, Club Good, or Public Good. Descriptions of each good will serve as hints. Remember, our textbook outlines only two types of goods, see the notes and lecture video for the other two types. a) An NPR (radio) signal - which is available to everyone with a radio, whether or not they contribute, the signal does not diminish no matter how many people tune in. [Select] b) A new Ford truck this can only be purchased by one person, you can not drive it off the lot without paying for it. [Select] c) A subscription to Disney+ - you can not have a subscription without paying for it, purchasing a subscription does not lower the total number of subscriptions available. [ Select] d) A fireworks show on the 4th of July - the fireworks are visible to everyone in the town, whether or not they contributed anything to the display, one person viewing the fireworks does not make them less visible for anyone else. [Select] e) A…arrow_forward
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