User Account

All Pages

Calculate the total social marginal benefit function

Assignment Help Microeconomics
Reference no: EM13156474

Because of the economic sanctions, "Cast Away Islands" cannot import Hollywood movies or DVDs. EunYoung is a super genius computer engineer in "Cast Away Islands" and she knows how to make computer files (avi. File) of Hollywood movies by hacking into Hollywood productions' system. Once she produces this computer file, people in "Cast Away Islands" can watch the movie without paying and any number of people can watch it at the same time. There are two types of consumers, those who really like Hollywood movies (type A) and those who do not (type B). Their marginal benefits are given by

MBA = 30 - Q for Q<30
MBB = 10 - Q for Q <10

where Q is the number of different computer movie files EunYoung produces. There are 50 type A individuals and 100 type B individuals. For higher numbers of computer movie files, assume marginal benefit is equal to zero. Fixed costs of producing computer movie files at all are $400 (EunYoung needs a special equipment), and the marginal cost of producing a computer movie file is a constant $60/movie. (Note: Ignore international legal issues involved with copyrights)

(a) Calculate the total social marginal benefit function.

(b) What is the socially efficient number of computer movie files?

(c) Assume that EunYoung is operating in a market. How many computer movie files will EunYoung produce?

(d) "Cast Away Islands" government is planning to finance EunYoung's operation and the government proposes a uniform tax (each person pays an equal amount toward the cost of each computer movie file). How many computer movie files type A want? How many computer movie files type B want? Will this proposal make every individual better off than if EunYoung's operation did not exist?

(e) Now suppose that the Type B people band together and refuse to pay their tax. Could this be a rational decision on their part? Explain your answer.

Reference no: EM13156474

Questions Cloud

Contrast transformational management with boss : Contrast transformational management with the boss (the guy with the twin points of hair) in Dilbert. How do the other Dilbert characters react to the boss?
Preparing a statement of owner equity : When you are preparing a Statement of Owner's Equity and have to subtract the investments to get the beginning capital, do you subtract the cash in bank? Is that an investment?
Calculate the present worth of all of the costs : If an option existed for an equivalent computer system to be purchased for $810 per month, paid at the end of each month in 2012, should they take this plan instead? Explain Answer!
What is the expected partial pressure of so2(g) : After the reaction comes to equilibrium, an additional 1.00g of O2(g) is added to the system. What is the expected partial pressure of SO2(g) then?
Calculate the total social marginal benefit function : Calculate the total social marginal benefit function and what is the socially efficient number of computer movie files?
What happens to the structure of pka when camp : How the term "consensus sequence" (-RRX(S/T)Y-) relates to the activity of PKA where X is a small amino acid residue (e.g., G), and Y is a large hydrophobic residue (e.g., I), making it clear that you know how the term relates to the function and ..
Amount of cash paid on accounts payable : What was the amount of cash paid on accounts payable during the year ended December 31?
How many grams of water are consumed : how many grams of water are consumed if 4.0 g of hydrogen gas and 32.0 g of oxygen are produced
Test null hypothesis that the population mean is given value : You collect a sample of 100 observations on monthly spending on fast food. The sample mean is $96 and the sample variance is 400. Test the null hypothesis that the population mean is $100. Show your work.

Reviews

Write a Review

Microeconomics Questions & Answers

  Derive equation for demand curve

Derive the equation for the demand curve facing the airline during the winter month of January if P = $100, PC = 150, BAI = 200, and S+0 (Price should be expressed as a function of quantity.)

  What is key independent variables

What is the question you want to use the dataset to try and answer? What is your key independent variable(s)?

  What is the levelized cost of electricity

what is the levelized cost of electricity per kW-hr and Which press should you purchase if 120,000 nondefective units per year are produced by each press and all units can be sold?

  Describe the nature of the market failure

A company is manufacturing output in a competitive market, where demand is P = 24 - 2Q. Describe the nature of the market failure and derive Pareto optimal level of output.

  Distinguish between long-run and short-run profits

Does this case illustrate the law of diminishing marginal productivity and in this case, less and less of a single factor, labor, is being used. Does this have anything to do with the law of diminishing marginal utility?

  Calculate the control costs under the tax policy

Calculate the control costs under the tax policy and compare their total to that achieved under the command and control policy in (d). Which policy is more cost effective? Why do you expect this finding to be true in general?

  What is the cost to government for imposing the estate tax

What is the cost to government for imposing the estate tax and what is the cost to the taxpayer for imposing the estate tax on him?

  Calculate the profit that the manager

The manager of EverClean finds two output levels that appear to be optimal. Show what these levels of output are, and explain which one is actually optimal.

  How should the firm allocate production

The firm faces a constant marginal revenue curve given by:MR = 200 and how should the firm allocate production?-How much should Factory #1 produce and how much should factory #2 produce?

  Estimate an index model running regression

Think the single-index model. The alpha of a stock is 0 percent. The expected return on the market is 12 percent. The risk-free rate of return is 6 percent.

  Law of diminishing returns

Keeping the Law of Diminishing Returns in mind, comment on the quality of teaching and learning that occur when a resident successively works her 60th, 70th, 80th and 90th hours in a week.

  Merger and acquisition of firms operating under cournot comp

The question is that if two firms in the Cornout market merge into one firm, what would the merger result in? how much of marginal cost would prevail in the market, etc are answered in a detailed in manner in the solution.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd