A negative externality means the quantity in the market is _____ the allocatively efficient quanitity and can be corrected by a _____. A positive externality means the quantity in the market is _____ the allocatively efficient quantity and can be corrected by a ______.

A negative externality means the quantity in the market is ___ the allocatively efficient quanitity and can be corrected by a _. A positive externality means the quantity in the market is _ the allocatively efficient quantity and can be corrected by a ____.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter10: Externalities

Section10.1: Externalities And Market Inefficiency

Problem 1QQ

See similar textbooks

Related questions

Q: Project managers typically deal with conflicting demands. Describe methods that project managers can…

A: Project management refers to the managerial decisions and functions carried out by the managers in…

Q: According to the IS-LM model, what happens in the short run to the interest rate, income,…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Discuss the meaning of Zakat, its legitimacy on economic perspective

A: Zakat is a financial term related to Islam that refers to a type of tax that a Muslim person has to…

Q: Scooter's Scooters is a large American manufacturer of electric scooters operating out of Fort…

A: Economies of scale is when the increase in output decreases the average total cost. Diseconomies of…

Q: • A company issued 50 bonds of P1000 face value each, redeemable at par at the end of 15 years to…

A: Disclaimer: As per the honour code, I am providing you with the answer to the first question. Kindly…

Q: The elasticity of demand for a firm’s product is -2.5 and its advertising elasticity of demand is…

A: Profit maximization is the act of accomplishing the highest revenue or profit. The level of sales…

Q: Five fishermen live in a village and have no other employment or income earning possibilities…

A: Marginal Cost refers to the change in the total cost of one extra unit of output produced.

Q: Assume that someone has inherited 2,000 bottles of wine from a rich uncle. He or she intends to…

A: Given, Someone inherited 2,000 bottles. She intends to drink these over the next 40 years. Utility…

Q: Assume that producers in Luzon can only produce 11 billion kg of palay at the time of harvest even…

A: Price elasticity shows the change in quantity due to change in price. Price elasticity is given by…

Q: Vhee Ayar lives alone in a computer lab where it spends 10 hours per day producing spurious orrside…

Q: Suppose a farmer makes $R in revenue from crops each year if they do grow, but there is a…

A: When the payoffs are uncertain (which means there are some chances of losses). Then in order to…

Q: Draw a graph of "catch-up" displaying low saving rates, low levels of health, and low levels of…

A: The catch-up effect, also known as the convergence theory states that all economies will ultimately…

Q: 6- Consider a consumer with a utility function U(X,Y) = 4√x + √Y a) Evaluate whether marginal…

A: *Since ,question 5 requires value of 'A' to solve for final answer the question is incomplete . We…

Q: In the short run, at a market price of $20 per wind chime, this firm will choose to produce On the…

A: In perfect competition , Firm will produce where P = MC P is the market price MC is the marginal…

Q: Banks that are too-big-to-fail refers to: a. Banks with multiple branches and a large number of…

A: The primary function of financial regulators is to prevent systematic risk and avoid financial…

Q: 5. Assuming the same wages and technology as before - how much does it cost the firm to produce q =…

A: ISO-Quant: Iso -Quant shows different combination of capital and labour such that each combination…

Q: the next 6 hours of her free time. She could choose Aisha is considering how to allo between leisure…

A: Consumer A can allocate her time between leisure (L) and to do house chores. Consumer A has 6 hours…

Q: Kenji lives in Mississauga and runs a business that sells pianos. In an average year, he receives…

A: Economic profits and accounting profits are two kinds of profits. Economic profit implies total…

Q: 13.) A recapping plant is planning to acquire a new Diesel generating set to replace its present…

A: When IRR is higher than the MARR, the investment will be economic. When IRR is lower than the MARR,…

Q: 4. A firm has technology such that it can produce... q = L + K a. What name do we give to this…

A: ANS .4 Production function refers to the output produced with the help of the factors of production…

Q: A man expects to receive P29,194 9 years from now. How much should he invests for three consecutive…

A: Present value is the value of investment in today's dollar. Future value is the value of investment…

Q: Determine the exact simple interest on 10,620 for the period from Jan 6 to Nov 28, 1992, if the rate…

A: Given Loan amount (P)=10,620 The interest period is between Jan 6 to Nov 28, 1992. Rate of interest…

Q: B1: Interpret these Graphs: Name the top 2 items causing inflation per graph. Inflation continues to…

A: Inflation is a phenomenon that occurs when there is a considerate rise in the price of the products…

Q: What is the opportunity cost (amount & item) of increasing production from 27,000 tons of coffee to…

A: Opportunity cost refers to the foregone Opportunity by producing or consuming something else. Since…

Q: Consider a town in which only two residents, Van and Amy, own wells that produce water safe for…

A: Monopoly refers to the form of market in which there is one single seller, and they selling the…

Q: You are solving using the future worth method. If one of its cashflows is the machine’s market value…

A: Present worth is the value of investment in today's dollar. Future worth is the value of investment…

Q: How does increased government spending affect the aggregate demand curve?

A: Aggregate demand is the sum of all the components of demand. Components of AD are Consumption ,…

Q: Consider a consumer with wealth w who consumes two goods, which we shall call goods A and B. Let the…

Q: • Maintenance cost of an equipment is P200000 for 2 years, P40000 at the end of 4 years and P80000…

A: The present value of the cash flow series will provide the cash flow series present value i.e. when…

Q: can you answer part d

A: Price Effect: If the price of a good changes, then it affects the demand for the good. And we can…

Q: What is The Effect of a Government Budget Deficit on Investment?

A: A budget deficit creates when expenses are more than revenue and can indicate the financial health…

Q: Calculate the average total, fixed and marginal costs for a “competitive” firm with the following…

A: We get fixed cost by taking the total cost at q=0 At q=0, TC=10. Hence, fixed cost. FC=10

Q: 19:12 1! ← ECON-100 MC Questions-22 DEC 2022 - Rea READ-ONLY - This is an older file for... 1) In…

A: "Since multiple questions have been asked by you, we will solve only the first questions. Please…

Q: The GDP in China is $12.2 trillion. The rate of inflation is 2.5%. If the population of China is…

A: Per capita GDP measures the output per person and provides knowledge about the overall productivity…

Q: Which of the following conditions is most likely essential for implementing a successful market-…

A: Pricing strategy is important in every business. Firms set pricing in such a way that the price…

Q: part e please

A: Given information Utility function : U = 3L + P Wage rate (w)= 25 per hour Price of pizza (P) =…

Q: explain the different types of games and discuss how prisoners dilemma is applicable in managerial…

A: Game theory is defined as the study in which the economic agents produce outcomes according to the…

Q: Given market demand QD =50_p and market supply p =Qs +5 find the market equilibrium price and…

A: Demand for a good refers to the quantity of the good demanded at various price by the consumers…

Q: 7. Risk aversion. Suppose that you took part in a lottery that had a chance to increase, decrease,…

A: Given information Utility function U=I^0.7 Probability of original income $500=0.5 Probability of an…

Q: On the diagram sample (a) show the effect of increase in money demand (money supply is fixed) on…

A: The analysis of the money market and the goods market, which together establish the equilibrium…

Q: Statement Between points A and B, curve II is unit elastic. Between points A and D, curve JJ is…

A: Elasticity simply represents the percentage or proportional change in one factor or variable due to…

Q: 3. Angstrom Technologies intends for the company to use the newest and finest equipment in its labs.…

A: To compare the alternatives we will find the annual worth of expenses with making use of the…

Q: why would someone rather be a borrower during a period of unexpected rising inflation, and a lender…

A: Inflation is rise in average general price level of goods and service over period of time. if…

Q: The biological relationship between the growth for the fish population and the size of the fish…

A: given that, g = 15S(1 - S/5) g is the growth of the fish population and S is the size of the…

Q: Answer the folloeing with solution..

A: We have Machine cost = 15000 Sales tax and shipping cost = 1000 Nonrecurring installation cost =…

Q: There is a moral hazard problem when... Group of answer choices A) one agent has private information…

A: Moral hazard occurs when one party is willing to accept more risk in exchange for greater rewards.…

Q: The most important advantage of discount policy is that the Fed can use it to perform its role as…

A: By raising or lowering interest rates, the central bank can control the flow of money in the economy…

Q: Consider that there are two goods, good X and good Y, which are perfect substitutes. The consumer…

A: "Since multiple questions have been asked by you, we will solve the first question. Please specify…

Q: If the following explanation (or expression) is correct, please indicate "True (T)". Or, if the…

A: A trade between two or more nations is called international trade or foreign trade. International…

Q: In the following demand and cost functions & is selling ponce at Q is quantity in the Thousars P =…

A: Profit is maximized at the level where marginal revenue and marginal cost are equal. This is the…

Question

Word Bank: Larger than, tax, smaller than, subsidy, smaller than, equal to, subsidy, larger than, equal to, tax.

Definition Definition State in which the marginal benefit to a consumer is equal to the marginal cost of producing a product. Allocative efficiency occurs when all the market participants (buyers and sellers) have all of the knowledge required to make informed decisions regarding consumption and production of goods and services.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Introduction

VIEW

Final Answer

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Property Rights, Bargaining And The Coase Theorem

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Draw a standard supply and demand diagram for televisions, and indicate the equilibrium price and output. a. Assuming that the production of televisions generates external costs, illustrate the effect of the producers being forced to pay a tax equal to the external costs generated, and indicate the equilibrium output. b. If instead of generating external costs, television production generates external benefits, illustrate the effect of the producers being given a subsidy equal to the external benefits generated, and indicate the equilibrium output.
Price per bin 120 110 100 90 80 70 60 50 40 30 20 10 $800 $900 $450 1 $1250 1 I 1 + V D The figure represents the market for apples. Assume there are no externalities. Suppose a sales tax of $40 per bin of apples is levied on consumers of apples. The after-tax supply curve is labeled S+t. What is the dollar amount of the REVENUE collected by this tax? To review this concept, see the section Taxes and Efficiency. S+t S 10 20 30 40 50 60 70 80 90 100 Bins of apples
Question 10 The main purpose of a correct subsidy in a market with positive externalities is to A. Increase the Qoptimum B. Decrease the Qoptimum C. Increase the QMarket D. Decrease the QMarket
Compared to a good with no externalities, a good with a negative externality at each corresponding price. will appear to have experienced a Olncrease in Supply ODecrease in Supply Olncrease in Demand ODecrease in Demand
Explain a positive and negative externality that you have recently consumed. Please relate your answer to the characteristics of elasticity. Why does the government have to get involved when an externality is present in the market?
Policymakers are provided data about the private and social benefits of a good being sold in the market. Quantity Private MB ($) Social MB ($) 4 9. 5 4 7 6. 2 5 7 3 What is the size of the externality? If the externality is positive, enter a positive number. If negative, make it a negative number. Enter numeric value Given this data, policymakers must decide whether to address the associated externality with a subsidy or a tax. As their economic consultant, which of the two policy tools would you recommend? a subsidy a tax
A market for a good contains a negative production externality. The following functions describe the market: MPB = 171 - 0.15Q MPC = 13 + 0.1Q MEC = 19 Currently there is no tax. Calculate the benefit if the government adds a tax of $8 per unit.
Consider Good A. There are NO externalities associated with Good A. a.) Draw a ( general- you don’t need any specific numbers) graph that shows the deadweight loss that would result if a tax is placed on Good A. b.) Suppose that, after the tax is placed on Good A, the quantity consumed ( by all customers) is equal to 90,000 units of Good A. Is the efficient level of output in the market for Good A greater than 90,000 , less than 90,000 , or equal to 90,000 ( just circle your answer ; you don’t have to explain)? (7) The efficient level is greater than 90,000 The efficient level is less than 90,000 The efficient level is equal to 90,000
QUESTION 38 | To internalize a positive externality: a. the consumers of a good could receive a subsidy equal to the external benefit resulting from the production or consumption of the good. b. a producer's costs could be increased by an amount equal to the external benefit resulting from the production of the good. c. consumers of the good could pay a tax equal to the external benefit resulting from the production or consumption of the good. d. Both (a) and (c) are correct O E O O O D B A с e. none of the above
During 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…
Which of the following types of goods and services should be taxed in order to discourage their production? Which of the following types of goods and services should be taxed in order to discourage their production? Goods and services with high inocme elasticities of demand Goods and services with negative externalities Goods and services with high price elasticities of demand Goods and services with positive externalities
Refer to the above graph to answer this question. If buyers of this product were subsidized by an amount equal to the external benefits, what would be the total cost to the government of the subsidy a. $10,000. b. $6,000. c. $8,000. d. $14,000. e. $18,000.