Microeconomics (7th Edition)
7th Edition
ISBN: 9780134737508
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 5.2.6PA
To determine
The marginal cost and marginal benefit for reducing crime.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Based on market research, a film production company in Ectenia obtains the following information
about the demand and production costs of its new DVD:1
Demand: P = 1,000 – 10Q
Marginal Revenue: MR = 1,000 – 20Q
Marginal Cost: MC = 100 + 10Q
a. Find the price and quantity that maximize the company’s profit.
b. Find the price and quantity that would maximize social welfare.
c. Use a graph to illustrate the DWL and calculate the dollar value of the DWL.
come up with your own example of positive externality and then another example of negative externality. Briefly explain why they can be considered externalities.
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…
Chapter 5 Solutions
Microeconomics (7th Edition)
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 - Prob. 5.1.10PA
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
Knowledge Booster
Similar questions
- Question 3 Professor Paudel shows the graph for the case of negative externalities in the class. He wants the class to think about positive externalities as well. This got him thinking a lot about potential market failure due to positive production externality in the oil exploration market. Specifically, in his research, he found that expenditures on oil exploration by any company can have a positive externality because they offer more profitable opportunities for other companies. Professor Paudel wants you to enlighten him on the following issues: a) Graphically show private and social marginal cost functions and the demand curve. b) Under positive externalities as mentioned above, is the social marginal cost below than the private marginal cost? Explain and support your answers with the help of a clearly labeled graph. c) Under positive externalities as mentioned above, what's the relationship between social optimum quantity and the competitive market equilibrium quantity? Is there…arrow_forwardFrom 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)arrow_forwardBriefly explain what is meant by the term "externality" and how it occurs. a. What are the two types of externalities? b.How does government fix both of these issues? c. Is government intervention necessary? Why or why not?arrow_forward
- Economists define the efficient amount of fund pollutants as the amount that minimizes the sum of damage and control costs. Using this definition, they derive two general rules, one of which is that the efficient level of pollution is not generally zero. Briefly explain why this is true.arrow_forwardFrom the book: Omnivore's Dilemma, chapters 9-12 for a discussion board A) In an economic transaction between a producer and a consumer, an externalized cost or (negative) externality is a cost to someone who is not involved in the transaction. For example, the consumer doesn't pay for it, and the producer doesn't pay for it. Joel Salatin alludes to this concept when he talks about food that is not “honest.” List three externalized costs associated with food production (and consumption), and try to identify the third part(ies) likely to pay for each. Which cost on your list concerns you the most?arrow_forwardThere are three identical firms in Happy Valley. Firms Initial Pollution Level Cost of Reducing Pollution by 1 unit A 30 units $20 B 40 units $30 C 20 units $10 The government wants to reduce total pollution to 60 units, so it gives each firm 20 tradable permits. Who sells permits and how many do they sell? Who buys permits and how many do they buy? Briefly explain why the sellers and buyers are each willing to do so? What is the total cost of pollution reduction in this situation? How much larger would the cost of pollution reduction be if the permits could not be traded?arrow_forward
- John Cassidy, a writer for the New Yorker magazine, wrote a blog post arguing against New York City’s having installed bike lanes. Cassidy complained that the bike lanes had eliminated traffic lanes on some streets as well as some on-street parking. A writer for the Economist magazine disputed Cassidy’s argument with the following comment: “I hate to belabor the point, but driving, as it turns out, is associated with a number of negative externalities.” What externalities are associated with driving? How do these externalities affect the debate over whether big cities should install more bike lanes? J. Cassidy. Battle of the Bike Lanes. New Yorker, March 8, 2011. The World Is His Parking Spot. Economist, March 9, 2011. Initial Response should be at least 250 words and should include at least one reference in APA format. The Peer Response should be at least 100 words and add value.arrow_forwardThere are three industrial firms in Kitona. The Government wants to reduce pollution to 120 units, so it gives each firm 40 tradable pollution permits. Firm Initial Pollution Level Cost reducing pollution by 1 unit A 70 Units $20 B 80 Units $25 C 50 Units $10 Who sells permits and how many do they sell? Who buys permits and how many do they buy? Briefly explain why the sellers and buyers are each willing to do so. What is the total cost of pollution reduction in this situation?arrow_forwardThe graph shows the marginal benefit and marginal cost of a waste disposal system in a city of 1 million people. What is the efficient capacity of the waste disposal system and how much does each citizen pay in taxes? The efficient capacity is ... million gallons a day. If the city installs the efficient capacity, each person pays ... in taxes.arrow_forward
- There are three industrial firms in Kitona. The Government wants to reduce pollution to 120 units, so it gives each firm 40 tradable pollution permits. Firm Initial Pollution Level Cost reducing pollution by 1 unit A 70 Units $20 B 80 Units $25 C 50 Units $10 Who sells permits and how many do they sell? Who buys permits and how many do they buy? Briefly explain why the sellers and buyers are each willing to do so. What is the total cost of pollution reduction in this situation? How much higher would the cost of pollution reduction be if the permits could not be traded?arrow_forwardThink of an example of a good (or service) that is a common resource (i.e., it is non-excludable and rival in consumption). Briefly explain why your example is a common resource.arrow_forwardIn an article in the agriculture magazine Choices, Oregon State University economist JunJie Wu made the following observation about the conversion of farmland to urban development: Land use provides many economic and social benefits, but often comes at a substantial cost to the environment. Although most economic costs are figured into land use decisions, most environmental externalities are not. These environmental "externalities" cause a divergence between private and social costs for some land uses, leading to an inefficient land allocation. For example, developers may not bear all the environmental and infrastructural costs generated by their projects. Such "market failures" provide a justification for private conservation efforts and public land use planning and regulation. What does the author mean by market failures and inefficient land use allocation? Explain why the author describes inefficient land allocation as a market failure. Illustrate your argument with a…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
