The diagram to the right depicts the market for cough medicine in a small town. The quantity of cough medicine ismeasured in bottles sold per week; price is measured in dollars. The townspeople are happier and healthier becausepeople who have colds and flus buy and take the medicine and reduce the spread of infection. What is the sociallyoptimal number and price of cough medicine?$28-$24-.....The socially optimal equilibrium occurs at a quantity ofbottle(s) and a price of $$20-$16-S$12-$11$10$8-$4-DAQ16: 20$0-10203040

In a market, when an activity has a positive impact on society, it will increase social marginal…

Answered: The diagram to the right depicts the…

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Frontiers Of Microeconomics

Section: Chapter Questions

Problem 8PA

See similar textbooks

Similar questions

Scenario 4 Suppose there are two residents in a neighborhood, Tana and Jason. Tana's demand for clean streets is Q = 100 – 4P. Jason's demand for clean streets is Q = 80 – 2P. If your answer is not a whole number, please make sure to round to the nearest hundredth. Refer to Scenario 4. What is the socially optimal number of clean streets if the marginal cost of cleaning them is $35? and what is the socially optimal number of clean streets if the marginal cost of cleaning them is $5?
What is the number of fishing trip that will occur in the SOCIALLY OPTIMAL equilibrium?
Public Goods. Suppose a neighborhood in Segovia’s central business area is deciding how many fountains they want to see in the main avenue. There is a first group of 20 neighbors and each has a demand Q = 20 − P for fountains. There is a second group of 5 people, and each has a demand Q = 20 − 2P for fountains. The cost of building each fountain is 225. How many fountains are socially optimal? Fountains are public goods. Hint: To obtain the SMB, please first transform the demand functions into “public goods’ valuations” (“isolate P”) and then multiply them by the amount of neighbors per group. Then you can proceed with the vertical summation.
Question 17 Suppose Margaret and Thomas are the only two homeowners in the neighborhood. Margaret's demand for clean streets is Q = 50 - 2P. Thomas's demand for clean streets is Q = 40 - P. If the marginal cost of cleaning the streets is $35. The socially optimal number of clean streets is 20 streets. (Note: this should a numerical answer) Margaret will pay $ Thomas will pay $ for cleaning the streets. for cleaning the streets.
Please label the graph point where the socially optimal equilibrium is
Scenario 4 Suppose there are two residents in a neighborhood, Tana and Jason. Tana's demand for clean streets is Q = 100 – 4P. Jason's demand for clean streets is Q = 80 – 2P. If your answer is not a whole number, please make sure to round to the nearest hundredth. Refer to Scenario 4. Find the social demand curve for clean streets in this neighborhood. What is the slope of the social demand curve? and what is the socially optimal number of clean streets if the marginal cost of cleaning them is $95?
Consider a small town with a factory that produces cell phones. The factory's production causes air pollution, which affects the health of the residents. Draw a graph representing the market for cell phones in this town. Label the socially optimal level of output and the market equilibrium level of output. Explain the difference between the two levels.
A firm has 20 employees, each of whom desires a more pleasant work environment. Accordingly, they are considering planting shrubs near the firm’s parking lot. Each employee has an inverse demand for shrubs of P = 10 − Q, where Q is the number of shrubs. The marginal cost of planting shrubs is $20 each. 1. What is the socially efficient quantity of shrubs to plant? 2. How much would each person have to pay per shrub to achieve the efficient quantity? 3. How many shrubs are likely to be planted? Why?
Harold smokes cigarettes but his office mate Kumar hates smoking. Harold and Kumar havethe following utility functions:UH = 100 + 10z – 0.1z2UK = 100 – 10z,where z is the number of cigarettes smoked by Harold (and UH includes the cost of cigarettes).Determine:a. The number of cigarettes smoked by Harold when the external effect on Kumar is ignored;b. The socially optimal number of cigarettes smoked. To find the socially optimal numberof cigarettes smoked, we create a social welfare function (SWF). The SWF is definedas the sum of Harold’s utility and Kumar’s utility. Using this approach, find the sociallyoptimal level of cigarettes that should be smoked by Harold;c. The Pigouvian tax needed to reach this social optimum;d. The outcome with Coasian bargaining when the property right is assigned Harold;e. The outcome with Coasian bargaining when the property right is assigned to Kumar.
10-) Suppose 10 people each have the demand Q = 20 – 4P for streetlights and 5 people have the demand Q = 18 – 2P for streetlights. The cost of building each streetlight is 3. If it is possible to purchase a fractional number of streetlights, how many streetlights are socially optimal?
What is the socially optimal quantity, and how much is the social cost at this quantity?
An externality arises when a firm or person engages in an activity that affects the wellbeing of a third party, yet neither pays nor receives any compensation for that effect. If the impact on the third party is adverse, it is called a externality. The following graph shows the demand and supply curves for a good with this type of externality. The dashed drop lines on the graph reflect the market equilibrium price and quantity for this good. Adjust one or both of the curves to refiect the presence of the externality. If the social cost of producing the good is not equal to the private cost, then you should drag the supply curve to reflect the social costs of producing the good; similarly, if the social value of producing the good is not equal to the private value, then you should drag the demand curve to reflect the social value of consuming the good. -O- Supply Demand Supply Demand QUANTITY (Unts) With this type of externality, in the absence of government intervention, the market…

SEE MORE QUESTIONS

Recommended textbooks for you

Principles of Microeconomics

Economics

ISBN:

9781305156050

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Economics, 7th Edition (MindTap Cou…

Economics

ISBN:

9781285165875

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Essentials of Economics (MindTap Course List)

Economics

ISBN:

9781337091992

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Microeconomics

Economics

ISBN:

9781305156050

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Economics, 7th Edition (MindTap Cou…

Economics

ISBN:

9781285165875

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Essentials of Economics (MindTap Course List)

Economics

ISBN:

9781337091992

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Microeconomics (MindTap Course List)

Economics

ISBN:

9781305971493

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Economics (MindTap Course List)

Economics

ISBN:

9781337617383

Author:

Roger A. Arnold

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS