Microeconomics
13th Edition
ISBN: 9781337617406
Author: Roger A. Arnold
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 17, Problem 1QP
To determine
Explain when
Expert Solution & Answer
Explanation of Solution
When the marginal external cost (MEC) is zero, the marginal
Economics Concept Introduction
Marginal social benefit (MSB): Marginal social benefit (MSB) is a high utility or satisfaction felt by an individual when they purchase an additional unit of a good or service.
Marginal social cost (MSC): Marginal social cost is the added cost spent for producing an extra output of a unit.
Marginal external benefit (MEB): The marginal external benefit refers to the amount of additional benefits obtained in the process of increasing one more unit of output to third party.
Marginal external cost (MEC): The marginal external cost refers to the amount of additional cost obtained in the process of increasing one more unit of output to third party.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
can an external demand be met by an economy whose technology matrix is the identity matrix? Explain. Include in your explanation what the practical meaning of a technology matrix that is given by the identity matrix.
Describe PRIVATE COST by GRAPH.
As an Economist, tell us briefly how you think
the COVID 19 pandemic has also affected the
economy of your country?
Chapter 17 Solutions
Microeconomics
Ch. 17.1 - Prob. 1STCh. 17.1 - Prob. 2STCh. 17.2 - Prob. 1STCh. 17.2 - Prob. 2STCh. 17.2 - Prob. 3STCh. 17.2 - Prob. 4STCh. 17.3 - Prob. 1STCh. 17.3 - Prob. 2STCh. 17.3 - Prob. 3STCh. 17.4 - Prob. 1ST
Ch. 17.4 - Prob. 2STCh. 17.4 - Prob. 3STCh. 17.5 - Prob. 1STCh. 17.5 - Prob. 2STCh. 17.5 - Prob. 3STCh. 17 - Prob. 1QPCh. 17 - Prob. 2QPCh. 17 - Prob. 3QPCh. 17 - Prob. 4QPCh. 17 - Prob. 5QPCh. 17 - Prob. 6QPCh. 17 - Prob. 7QPCh. 17 - Prob. 8QPCh. 17 - Prob. 9QPCh. 17 - Prob. 10QPCh. 17 - Prob. 11QPCh. 17 - Prob. 12QPCh. 17 - Economists sometimes shock noneconomists by...Ch. 17 - Prob. 14QPCh. 17 - Prob. 15QPCh. 17 - Prob. 1WNGCh. 17 - Prob. 2WNGCh. 17 - Prob. 3WNG
Knowledge Booster
Similar questions
- what is ecomics?arrow_forwardA river is being used by both a chemical factory for waste disposal and a salmon fishery for fish reproduction. Waste emissions from the factory detrimentally affect fish reproduction at the downstream salmon fishery. The chemical factory's emission levels are currently unregulated. The marginal damage caused to the salmon fishery is given by MD=4e, where e is the level of emissions discharged into the river per month by the chemical factory. To reduce its emissions, the chemical factory would face marginal abatement costs of MAC=800-16e. Suppose that instead of a constant tax of $T per unit of emissions, the government enacts a two- rate tax system, where the higher rate (call it TH) is designed to achieve the efficient level of emissions, and the lower rate (call it T1) is designed to collect just enough tax revenues to cover the damages from remaining emissions. 23. At what amount per unit should the government set for the higher rate? $ 24. At what amount per unit should the…arrow_forwardAn economist gives the following advice to a museum director: "You should introduce "peak pricing". At times when the museum has few visitors, you should admit visitors for free. And at times when the museum has many visitors, you should charge a higher admission fee." a) When the museum is quiet, is it rival or non-rival in consumption? Is it excludable or non-excludable? What %23 type of good-public or private - is the museum at those times? What would be the efficient price to charge visitors, and why? (I.e., should the price = $0, or should it be >$0?) %3D b) When the museum is busy, is it rival or non-rival in consumption? Is it excludable or non-excludable? What type of good is the museum at those times? What would be the efficient price to charge visitors, and why?arrow_forward
- Consider the following model of a hypothetical market for MSW management services: MPB = 25 − 2Q MPC = 4 + Q MEC = 0.5Q, where Q is the number of trash containers per household per month. A. Quantitatively determine the effect of the resource misallocation due to: the presence of the negative externality, and the use of a flat fee pricing system in the presence of a negative externality. B. Determine the dollar value of a waste-end charge that would restore efficiency to this market. Explain your answer intuitively.arrow_forwardThe local environmental authority levied an emissions fee of $30 per ton of waste on a firm that has the marginal cost of abatement (MCA) curve displayed in the figure below. What level of emissions will the firm release? How much will it pay in emissions fees?arrow_forwardGive at least five examples of hemogeneous products and their substitutearrow_forward
- Increases in carbon dioxide in the Earth's atmosphere have been cited as a probable cause of global warming. Let y represent the stock of carbon dioxide and let x > 0 (a constant) represent the flow of carbon dioxide emissions that come from industrial activity. Assume that the dynamics of y are given by y=x-y^a, where the term y^a represents the Earth's capacity to remove carbon dioxide from the atmosphere and allow its absorption elsewhere (i.e., in trees and oceans). (a) (2) Find the steady-state of stock of carbon dioxide. (b) (4) Suppose a > 0, show the steady-state in a phase diagram. Is the steady-state stable? (c) (4) Now suppose a <0, show the steady-state in a phase diagram. Is the steady-state stable?arrow_forwardDescribe, with a diagram, what a Marginal Abatement Cost Curve shows and how it can be used for assessing interventionsarrow_forwardGraphically analyze the effect that a revenue neutral carbon tax has on the consumption of carbon intensive goods.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning