Below is the the market demand curve for yard leaf cleaning when only the marginal private benefits (MPB) that thehomeowners receive from the clean yard are taken into account. If the government provides a subsidy to yard cleaningcompanies, equal to $10 per yard, the demand curve will shift and become the same as the marginal social benefitcurve (MSB). Move the demand curve to illustrate that. Provide your answer below:

Answered: Image /qna-images/answer/68f33cfe-e1e6-4e60-a124-0399129d9435.jpg

Answered: Below is the the market demand curve…

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter30: Market Failure: Externalities, Public Goods, And Asymmetric Information

Section: Chapter Questions

Problem 2WNG

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What exactly is a Pigovian tax? Give some instances of how the Pigovian tax can be used to tackle environmental issues.
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):
Consider the graph illustrating the supply, the demand, and the marginal social benefit (MSB) curves for one year of a university education. 1.Value of subsidy per student is... 2. New price is...
•Consider a product market with three consumers X, Y and Z with demand function QX = 6 – PX, QY = 3 – ½PY and QZ = 12 – PZ respectively, where P is the price in dollars and QX, QY and QZare the quantities demanded by Consumer X, Y and Z respectively. •If the product is public good, obtain the marginal social benefit function and draw the diagram. Determine the optimal quantity of the product in the market if the marginal cost of the product is constant at (a) $4, (b) $9 and (c) $16.
The attached figure indicates the initial market for tertiary education in a country that pays a subsidy of $10 000 per year to each student enrolled in tertiary education. iI is assumed that assume that: 1) education was left to the competitive free market; 2) the marginal private benefit is equal to the marginal social benefit; 3) the marginal private cost is equal to the marginal social cost. Identify the area of the figure that depicts the total size of the subsidy paid by the government to the students enrolled in tertiary education. Who gains and who loses from such a subsidy?
Based on the answers calculated here, what we can infer? Consumer surplus = Area of A+B+E =((30-20) x 2000/2) = 10000 Producer surplus = Area of C+D+F =((20-10) x 2000/2) = 10000 New Consumer surplus = Area of A+B+C = 2500+5000+5000 = 12500 Increase in consumer surplus = C - E =5000-2500 = 2500 New producer surplus = Area of D = 2500 Decrease in producer surplus = Area of C + F = 5000+2500 = 7500 Deadweight loss = Net loss in social welfare = Area of E + F =((25-15) x (2000-1000)/2) = 5000
Refer to Table 3. How large would a subsidy need to be in this market to move the market from the equilibrium level of output to the socially-optimal level of output?
Excessive consumption of soft drinks is positively correlated to the incidence of diabetes. Assume that the private total cost of production is PTC(Q)= Q^2 + 2Q. The social cost of soft drinks production is STC(Q)=11.5Q^2. The total benefit of soft drinks production is TB (Q)=50Q-Q^2. What quantity of soft drinks would be produced in a perfectly competitive market? What tax t(s) should the government impose to achieve the socially optimum quantity of soft drinks traded?
Excessive consumption of soft drinks is positively correlated to the incidence of diabetes. Assume that the private total cost of production is PTC(Q)= Q^2 + 2Q.The social cost of soft drinks production is STC(Q)=11.5Q^2.The total benefit of soft drinks production is TB (Q)=50Q-Q^2.What quantity of soft drinks would be produced in a perfectly competitive market? What tax should the government impose to achieve the socially optimum quantity of soft drinks traded?
Suppose the demand for standard sized bottled water in the US is Qd=120-30.5P where Qd is monthly quantity demanded in millions and P is the price per bottle in dollars and cents. If the marginal private cost (MPC) of producing the bottled water is one dollar, calculate the market equilibrium quantity. Explain what a constant marginal cost implies. Does that mean the total opportunity cost of producing bottled water is unrelated to how many are produced? Let’s assume that the marginal private benefit (MPB) of bottled water equals the marginal social benefit (MSB). Explain what that means. At the equilibrium calculated in part A, what do you know about buyers’ willingness to pay in each transaction?
The private marginal benefit associated with a product’s consumption is PMB = 360 – 4Q and the private marginal cost associated with its production is PMC = 6Q. Further- more, the marginal external damage associated with this good’s production is MD = 2Q. To correct the externality, the government decides to impose a tax of T per unit sold. What tax T should it set to achieve the social optimum?
Consider a product market with three consumers X, Y and Z with demand function QX = 6 – PX, QY = 3 – ½PY and QZ = 12 – PZ respectively, where P is the price in dollars and QX, QY and QZ are the quantities demanded by Consumer X, Y and Z respectively. If the product is public good, obtain the marginal social benefit function and draw the diagram. Determine the optimal quantity of the product in the market if the marginal cost of the product is constant at (a) $4, (b) $9 and (c) $16.

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