If the government imposes a corrective subsidy to fix the positive externality, what should that corrective subsidy be equal to? Price 00 Pm-Pn Pm Pm-Po Pn-Po Pm Pn m _n Po S 0 Qm Qn Qo S D2 Marginal social benefit D₁ Marginal private benefit Quantity
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- Give an example of a positive externality and an example of a negative externality.Show the market for cigarettes in equilibrium, assuming that there are no laws banning smoking in public. Label the equilibrium private market price and quantity as Pm and Qm. Add whatever is needed to the model to show the impact of the negative externality from second-hand smoking. (Hint: In this case it is the consumers, not the sellers, who are creating the negative externality.) Label the social optimal output and price as Fe and Qe. On the graph, shade in the deadweight loss at the market output.Some economists argue that early child care generates an external benefit to society. Consider the following supply-and-demand graph for early childhood education. A. How does the market equilibrium differ from what is best for society? B. If the government was going to provide a per-unit subsidy in this market in order to achieve the socially optimal outcome, how large of a subsidy would the government ne to provide? C. How much in total would the government need to spend in this market each month to achieve a socially optimal outcome? Price ($ per month) Supply $1,300 $1,200 $1,000 $900 Marginal social benefit Marginal private benefit (demand) 23 26 Quantity (millions per month)
- Some economists claim that early child care generates an external benefit to society. a. What is the market equilibrium? What is the socially optimal outcome? How do they differ? b. The government is planning to provide a per-unit subsidy for child care to achieve the socially optimal outcome. How large should this subsidy be? c. How much is the total government subsidy each month to reach a socially optimal outcome?Which activity generates a positive externality? O You buy a new jet-ski and find $5,000 under the seat. O Your neighbor begins building an addition onto his home at 6 a.m. O Your neighbor installs a bat house, and the bats eat mosquitoes. O Dave buys dental insurance but decides not to take the time to get his teeth cleaned at the dentietWhat exactly is a Pigovian tax? Give some instances of how the Pigovian tax can be used to tackle environmental issues.
- When an externality occurs governments may intervene to try to line up the social costs/benefits with the private costs/benefits. The following graph illustrates an externality in such a market. What type of government intervention would be recommended as a result of the externality indicated in the graph? Price Tax Subsidy Market Equilibrium SC PC PB QuantityCompared to a good with no externalities, a good with a negative externality will appear to have experienced a Increase in Supply ODecrease in Supply Olncrease in Demand i ODecrease in Demand i at each corresponding price.What is the externality in the market for alcohol? Draw a market diagram for alcoholic beverages, including private and social cost curves and private and social value curves. Identify the market equilibrium quantity, the socially optimal quantity, and thedeadweight loss associated with the externality. What policies do governments use to try to eliminate the externality associated with drinking DRAW PICTURE PLUS STEP BY STEP HOW TO DRAW IT Draw a market diagram for alcoholic beverages, including private and social cost curves and private and social value curves Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
- 30 8 01:12:27 Mc Graw Hill Use the following supply and demand graph to answer the question below. Price 0 ABC D₂ Multiple Choice Quantity S₁ and D₁ represent the current market supply and demand, respectively. S2 and D2 represent the socially optimal supply and demand. One way that the government could shift demand to its socially optimal level is to tax the sellers subsidize the buyers. tax the buyersSome economists claim that early child care generates an external benefit to society. Use the below graph to answer the following questions. Price ($ per month) Supply 1,300 1,200 1,000 900 Marginal Social Benefit 1. Marginal Private Benefit 23 26 Quantity (millions per month) What is the market equilibrium? What is the socially optimal outcome? How do they differ? a. b. The government is planning to provide a per-unit subsidy for child care to achieve the socially optimal outcome. How large should this subsidy be? с. How much is the total government subsidy each month to reach a socially optimal outcome?When does a subsidy that benefits consumers result in a more efficient allocation of a resource? A when the good being produced or consumed is not scarce B when the good being produced or consumed generates a negative externality when the good being produced or consumed generates a positive externality D when the equilibrium price of the good is one that consumers don't like