The figure below represents the productive activity of a research institute. Researchers create a positive externality because what they discover in their research labs can be learned by others who have not contributed to the research costs. The privately optimal level of production is:B C D E B C D E $ Ꭰ E C B Level of Activity

The figure below represents the productive activity of a research institute. Researchers create a positive externality because what they discover in their research labs can be learned by others who have not contributed to the research costs. The privately optimal level of production is:B C D E B C D E $ Ꭰ E C B Level of Activity

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter1: What Economics Is About

Section: Chapter Questions

Problem 15QP

See similar textbooks

Similar questions

Differentiate between technical efficiency and economic efficiency with examples
d) What are the firm's fixed and variable costs? e) What would be the socially optimal Q* and P* (round to 1 decimal place if needed)?
HighFlyer Airlines wants to build new airplanes with greatly increased cabin space. This will allow HighFlyer Airlines to give passengers more comfort and sell more tickets at a higher price. However, redesigning the cabin means rethinking many other elements of the airplane as well, like engine and luggage placement, and the most efficient shape of the plane for moving through the air. HighFlyer Airlines has developed a list of possible methods to increase cabin space, along with estimates of how these approaches would affect the planes operating costs and ticket sales. Based on these estimates, Table 13.5 shows the value of R, how much should the firm invest in R on top of the private return; that is, an R private return to HighFlyer Airlines would have a 9 social return. How much investment is socially optimal at the 6 interest rate?
A farmer is located next to the rancher. They face the following problem.Cattle graze on the farmer's fields and cause $30 worth of damage to corn each year. The rancher's business is worth $100 annually (not taking into account any crop damage). The farmer's business is worth $80 before the cattle trample the corn It would cost $10 to build a fence that would keep the cattle off the farmer's property. If the farmer is given property rights If the rancher is given property rights O A. the rancher will pay the farmer $30 in damages; the farmer will accept the $30 in crop damages B. the rancher will pay the farmer $30 in damages; the farmer will build the fence O C. the rancher will build the fence; the farmer will build the fence O D. the rancher will build the fence; the farmer will accept the $30 in crop damages
Some companies use this as an umbrella term to encompass all CSR efforts that make business more sustainable in the long term, including environmental efforts: O bottom-line O ethics O philanthropic O sustainability
Suppose the government, as part of its fight against COVID, allows restaurants to open but requires customers to be socially distanced, reducing the number of tables and the maximum number of customers who can be served a. Give an example of a fixed cost associated with running a restaurant? b What costs would you expect to be part of the extra cost asSsociated with serving one more diner in the restaurant? c. How would you expect the social distancing policy to affect the marginal and average cost.of serving a meal? You might find drawing a diagram helpful. d. How would you expect the social distancing policy to affect the price charged fona restaurant meal? You might find drawing a diagram helpful. e What would you expect to be the effect of the sccial distancino policy on entry and extinthe restaurant sector? You might fino drawing.a diagram helpful.
The government plans to construct a road to your village .it is envisaged that this project will increase income as all the villagers will be employed in one way or the other on this project .In performing the cost-benefit analysis of the project ,labor and income change become important cost and benefit components,respectively. True or false, and explain
Complete the accompanying table and answer the accompanying questions: a. At what level of the control variable are net benefits maximized? b. What is the relationship between marginal benefit and marginal cost at this level of the variable? Control variable Q Total benefits B(Q) Total cost C(Q) Net benefits N(Q) Marginal benefit MB(Q) Marginal cost MC(Q) Marginal Net benefits MNB(Q) 100 1200 950 210 60 101 1400 70 102 1590 80 103 1770 90 104 1940 100 105 2100 110 106 2250 120 107 2390 130 108 2520 140 109 2640 150 110 2750 160
Show all work. Draw graphs to explain your answers. The correct answers will include areas on the graph and dollar values. Suppose a chemical factory discharges waste products into a river resulting in significant damages to a local fishery. The marginal damage to the fishery (measured in terms of the value of lost fish stocks) is represented by the equation:MDC = 10E The chemical factory can reduce its effluent flows by treating its waste products. Its marginal abatement cost (MAC) function is given by the equation: MAC = 1,200 - 5E. What level of emissions will occur if the chemical factory is not regulated? What would the total abatement costs for the chemical factory be if emissions are controlled and reduced to zero? If no liability laws are in place, what damages will the chemical factory inflict on the fishery? (Hint: find TDC) If the government puts in place a liability law that requires the chemical factory to compensate the fishery for the damages it causes,…
Describe, with a diagram, what a Marginal Abatement Cost Curve shows and how it can be used for assessing interventions
Consider a competitive equilibrium with positive production externalities. In this econ- omy output will, (a) be equal to its Pareto optimal value. (b) exceed its Pareto optimal value. (c) be below its Pareto optimal value. (d) be where MRS.c = M RTL.c.
Explain what is involved in “social pre-conditions for take-off.”