Graphically represent the following: A corrective tax that achieves the socially optimal output A corrective tax that moves the market output farther away from the socially optimal output than was the case before the tax was applied
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Graphically represent the following:
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A corrective tax that achieves the socially optimal output
-
A corrective tax that moves the market output farther away from the socially optimal output than was the case before the tax was applied
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- Given the following information (which is identical to the scenario in the video), Demand: Q = 10,000-2P • Supply: Q = -500 + 5P Marginal External Benefit: MEB = 0.1Q %3D (a) Graphically show the private market quantity and the socially optimal quantity. Fully label the graph and draw all relevant curves. (b) Now suppose that the government implements a $400 subsidy per tree planted. Draw the "PMB + subsidy" curve and calculate the quantity attained with this $400 subsidy. (c) Is this $400 subsidy a "Pigouvian" subsidy? Why or why not?A state tax on portable electronic devices causes sales of a single model of a handheld calculator to decrease from 80 to 70 per week. The tax is assessed as a tax on sellers when they receive the units from suppliers. Drag the appropriate curves (including the Quantity curve) to show the effects on the market. To refer to the graphing tutorial for this question type, please click here. Price (S) 100 100 Quant 140 130 120 110 100 GO 80 80 70 00 00 40 30 20 10 80 Quantity (per week) What tax revenue will the state collect from sales of this one model of calculator through the new tax? The tax revenue is $ per week.Side 19 A mine owner faces the following marginal cost (MC) function: MC= 100 +15*X Where X is tons of the mineral extracted The mining of the mineral has external costs. The marginal external cost (MEC) has the following function: MEC = 5*X Where X is the tons of the mineral extracted. The (marginal) price curve (PC) has the following function: PC= 600 -5*X Where X is tons of the mineral the bought What is the optimal extraction level in tons? Vælg én svarmulighed O 15 O 18 O 23 O 20
- Suppose that you are examining the cigarette market in the US. The supply curve slopes upward, while the demand curve slopes downward. The market equilibrium quantity is 600 packs of cigarettes, while the socially optimal quantity is 300 packs of cigarettes. The 600th pack costs 13 dollars to produce for the producers, and the social cost associated with it is 16 dollars. If the government decides to implement a corrective tax policy to address the market failure in this market, the per unit tax is (please input a number without a dollar sign): A/ The total tax revenue is (please input a number without a dollar sign):Use the graph below to answer the following questions? MC M Social Demand Private Demand V Quantity (units/day) What is the socially optimal price for this market? [ Select] What is the socially optimal quantity for this market? [Select] What price will be the equilibrium price in this market? [Select ] What quantity will be the equilibrium quantity in this market? [Select] How can the government achieve the socially optimal quantity in equilibrium? [ Select ] Price ($/unit)Identify an external benefit that could be generated by the presence of a shopping mall for local residents.
- The term external to the exchange. refers to a market exchange that affects a third party who is outside or a) private costs b) externality c) market failure d) social costsQ) The demand for bags of cement is Qd=1500-10p, supply is Qs=20, a tax of $5 per bag exists. A government project requires the purchases of 150 bags of cement. What is the social opportunity cost of 150 bags of cement purchased for the project? use a diagram to explain.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.
- Use the graph below to answer the following: 20 15 10 10 15 20 Quantity (units) Consider a marginal damage of $5/unit due to a productive externality What is the socially optimal quantity demanded in the market? There is an OVERSUPPLY or UNDERSUPPLY (circle one) because of this externality of how many units? Price (S/unit)Concept Question 5.11 The federal government often aids farmers through systems of price supports. Suppose that the government sets a price support of $6 per pound in the rice market. The graph on the right shows this situation. 10- The price of rice would be $ 5 per pound if there was no price support. In order to maintain the price support, the government will have to purchase 200 pounds of rice. 8- The cost of this program to the government is S $5 4- 2- D 300 400 500 Quantity of rice Price of riceWith the existence of negative externality, determine the socially efficient level of output and price. When negative externality exists, the firms loose profits. Calculate the size of the firms’ loss.) On the other hand, the community’s gain from the social efficient allocation level. Interpret the results. Determine the net gain (or loss) to the society.
