Answered: Why is it socially efficient to set…

Why is it socially efficient to set marginal benefits equal to marginal costs rather than abating until total benefits equal total costs?

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter27: Markets And Government

Section: Chapter Questions

Problem 8E

See similar textbooks

Related questions

Q: Discuss the concept of strategic drift and examine the likely main strategic drift driver from the…

A: A state of strategic drift happens when a company’s strategic supervisors, who are in a…

Q: Wk 2- Apply: Market Dynamics and Eficiency (due Day 71 0 Help Seve & Exit Submit Seved S Price S…

A: Here all graph are in equilibrium. The equilibrium is achieved when demand for goods and services…

Q: Consider the demand curve illustrated in the figure to the right. Suppose at a price of $8 per unit,…

A: The information given is:- Price per unit = $8 Green area represents the firm revenue:- Whose…

Q: Given the following marginal cost values for a given asset, determine the equivalent uniform…

A: The marginal costs are $3,500 in year 1, $3,150 in year 2, and $3,400 in year 3 for an existing…

Q: Pa P. ATC P MC Demand Quantity MR Figure 15-15 shows the cost and demand curves for the Erickson F…

A: In monopoly, eqm Q(quantity) is found by the intersection of MC(marginal cost) and MR(marginal…

Q: Economics 1. Assume a nco-classical aggregate supply model with both long run and short run…

A: Supply and demand are the driving factors underlying the creation, price, and consumption of…

Q: A perfectly competitive firm maximizes its profit by producing the output at which its marginal cost…

A: "A perfectly competitive firm is a firm which is price taker. In perfectly competitive market there…

Q: [Basic static analysis of trade] Construct a simple model of the (wholesale) market for wheat…

A: The process of purchasing and selling items in big numbers and so at lower rates, mainly to…

Q: First, go back to the Study Plan for "Monopoly" and review the section on Monopoly and Antitrust…

A: An anti-trust policy is more suitable understood as an entire competition Policy, with the OFT and…

Q: 4. A stopwatch used for Time and Motion Study has a selling price of P1,500. If its selling price is…

A: Given; Selling price stopwatch used for Time and Motion Study= ₱1500 Selling price is expected to…

Q: how is the price of Fertilizer determined? we know that the price of a good is formed from the…

A: Demand and Supply The quantity of a commodity that Buyers are willing to buy at various prices is…

Q: "Tiffany" is a retailer monopolist who makes a unique product called the "diamond ring" that…

A: Monopolistic Market Monopolistic is a form of market where there is a large number of buyers and…

Q: Consider the demand curve P = 200 - Q facing a monopolist. The monopolist's cost function is given…

A: "A monopolist maximizes profits at a point where marginal revenue equates marginal cost."

Q: What role does the European Council play in the politics of the EU? In your opinion, is the European…

A: Introduction The European Council brings all together politicians of the European Union to determine…

Q: esla share price is $439.18; Netflix share price is $480.68; and Amazon share price is 3148.24.…

A: Tesla's share price is $439.18 Netflix share price is $480.68 Amazon's share price is 3148.24.

Q: a) Using IS/LM diagram explain the likely etfects of a fiscal financed by government borrowing on…

A: a) When government raises its budget deficit in order to increase output, it leads to a rise in the…

Q: Your firm is contemplating the purchase of a new $540,000 computer-based order entry system. The…

A: Cash flow extracted from the regular business processes is the operating cash flow. It is one of the…

Q: What is the difference between the rates of return for a renewable and nonrenewable resource? How do…

Q: What is GDP?

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: 21) The Indivisible reserve of savings and credit cooperatives is NOT covered by COSSEC insurance.

A: COSEC insurance protects the indivisible reserve of savings and credit cooperatives.

Q: Suppose that the elasticity of demand for BMW cars equals -2 in Germany and equals -3 in the U.K..…

A: Elasticity of demand: - Elasticity of demand measures the responsiveness of change in demand due to…

Q: Assume Gillette Corporation will pay an annual dividend of S$0.64 one year from now. Analysts expect…

A: D1 = 0.64 D2 = D1*(1 + g) = 0.64*1.127 = 0.7212 D3 = 0.7212*1.127 = 0.8128 D4 = 0.8128*1.127 =…

Q: b) Suppose a business faces a production function which is of the Cobb-Douglas form: Q(L,K) = AL“ K®…

A: Given output is a function of A, L and K. When we scale all factors of production in a given…

Q: By far the largest category of goods and services in the CPI basket is housing.' This statement is…

A: CPI or consumer price index is a fixed basket of goods that usually includes food, clothing,…

Q: Consider a market given by the following supply and demand equation: MC=1+5Q WTP=97-3Q If the…

A: A price floor is a type of price control, imposed by the government. A price floor is a minimum…

Q: 3. The price-supply and price-demand equations of a certain product are given by p = S(x) = 15 +…

Q: An award is being established, and t wil pay $11,200 every three years, with the fst instalment…

A: C = 11,200 r = 3%

Q: Refer to the diagram. Other things equal, the money demand curve in the diagram would shift leftward…

A: Graph Explanation: The Y-axis of the graph shows the interest rates and the X-axis shows the…

Q: To maximise profits, a competitive firm has a cost function, C(q) = 4q2 + 95 and produces 33 units…

A: The profit is maximized where the P=MC.

Q: uppose a company's bond sold for $900 last month and this month the price is $750. The annual…

A: last month price = $900 This month price = $750 Annual interest payment = $60 We have to calculate…

Q: Assume that people receiving intervention A live 5 years at quality of life of 0.8 and people…

A: Cost-effectiveness Cost-effectiveness is the method in economics that is to calculate the relation…

Q: 4B. Which one(s) of the following functions v(x, y) = 2x°y – 100, w(x, y) = 3(x+ y) + 120, t(x, y) =…

A: ordinal utility function is a function representing the preferences of an agent on an ordinal scale

Q: 1) Use the graph to answer the question below. The quantity is measured in thousands of units.…

A: As per the guidelines answer is given to the first question. (1) As per the diagram given in…

Q: )The graph below shows the marginal revenue, marginal cost, and average total cost at different…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Please perform the quantitative analysis with the above variables. 1.0 Introduction 1.1 Objectives…

A: Sales operations are a set of actions and processes that assist a sales organization run more…

Q: What would be the average life time value of a customer?

A: Answer is given below

Q: Your classmates from the University of Chicago are planning to go to Miami for spring break, and you…

A: Personal budgeting requires discipline. Individual choices on spending for loved ones can…

Q: total production) than smaller countries? a) Smaller countries tend to be poor so there are not…

A: International trade refers to the exchange of goods and services across borders.

Q: Explain how oil plays a role in the price of fertilizer. keep in mind-how oil plays a role in the…

A: Oil plays very important role in current world economy. For production of any good inputs are…

Q: Assume that sales are predicted to be $3,300, the expected contribution margin is $1,155, and a net…

A: To calculate the break-even point of a organization, the annual constant value is split by the…

Q: . The price-supply and price-demand equations of a certain product are given by p = S(x) = 15 + 0.1x…

A: Given Demand equation: p=D(x)=M-Nx ..... (1) Supply equation:p=S(x)=15+0.1x+0.003x2…

Q: Two firms are engaged in Cournot (simultaneous quantity) competition. Market-level inverse demand is…

A: Monopoly is the market condition where the supply of a particular good or product is controlled by a…

Q: Suppose that aggregate supply deceases while aggregate demand held constant. a. What happens to the…

A: "A short-run aggregate supply curve (depicts the amounts of total output supplied in an economy at…

Q: An analyst for FoodMax estimates that the demand for its "Brand X" potato chips is given by: InQx =…

A: Given; Demand function; InQXd=10.34-3.2InPX+4PY+1.5InAX Where; QX=QuantityPX=PricePY=Price of a…

Q: Explain the Coase Theorem and its limitations. Using an appropriate example and graphs explain how…

A: The Coase theorem asserts that negative externalities may be avoided by granting property rights and…

Q: What are the global perspectives on small business?

A: Meaning of Macroeconomics: The term macroeconomics refers to the situation of economic and…

Q: ARE RAPID ECONOMIC GROWTH AS MEASURED BY GNI OR PER CAPITA INCOME CONFLICTS WITH A MORE EQUAL…

A: Economies undergo economic growth can be calculated Using two methods. Either it can be done using…

Q: what political, economic, religious and other social factors influence population policy

A: A country's political, social, and economic actions influence how individuals see various policies.…

Q: Three firms compete in the style of Cournot. All firms have a constant returns to scale technology:…

A: Introduction Here three firms of Cournot model has given. Marginal cost of two firms also given.…

Q: Suppose an avocado farm has cost: C = 0.002q3 + 22q + 750 (where q is measured in bushels).…

A: Given an avocado farm: C = 0.002q3 + 22q + 750 .... (1) Marginal cost: MC=0.006q2+22 ... (1)…

Question

Why is it socially efficient to set marginal benefits equal to marginal costs rather
than abating until total benefits equal total costs?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Define social benefit.
Why social optimal output more beneficial to society?
The graph below depicts a schedule of two individual marginal benefit curves (MB1 and MB2) as well as the social marginal benefit (SMB) curve. This good is non-rival in consumption and non- excludable in use, so the SMB was constructed using vertical summation of individual MB curves. Which of the following are TRUE? $20 $15 $13 a b d e Q1 Q2 Q3 SMB MB2 MBI Quantity O b. If the social marginal cost is $20 per unit, then Q2 is the output level that maximizes social net benefit. O e. None of the above are true. O d. Only b and care true OC. The social marginal benefit of the Q1st unit is $28. O a. It must be the case that Q1+02-03,
What is ecological about ecological economics?
What is the socially optimal quantity, and how much is the social cost at this quantity?
Please label the graph point where the socially optimal equilibrium is
Define social cost.
Describe the definition of cost-benefit analysis.
How do property rights affect externalities and market failure? Do goods and services by definition have to be considered a property right? Are there any examples in which that may not be the case?
Use the attached image to answer the next three questions. What price and quantity will the firm in the diagram above produce? What’s the socially-optimal price and quantity? In the absence of government intervention, will this firm produce too much or too little?
Why is market definition important for economic decision making?
Q) Imagine any number of identical boats can fish along the North Carolina coast. The value of fishing (V) per boat as a function of the number of boats (N) is: V = 50 − 5N. The marginal value (MV) to the fishery of an additional boat is: MV = 50 − 10N. For each boat, the costs of fishing (C) are $10. If the fishery were managed in a way that only the socially efficient # of boats are allowed to enter the fishery, what would be the net value (i.e., total value minus total costs) of the fishery? Explain it early. Not solve in excel works