Example of negative externality

Assignment Help Business Economics
Reference no: EM132274968

Disposing of coffee pods is an example of negative externality. Left unregulated the equilibrium price is $5 and quantity is 5.

The efficient price is $6 and the efficient quantity is 4.

  • Why is the efficient price higher than the equilibrium price and why is the efficient quantity lower than equilibrium quantity?

Suppose the government imposed a $2 tax. This would make equilibrium price $6 and equilibrium quantity 4. There is deadweight loss and surplus

  • Discuss what mechanisms can be used to make the market efficient?

Reference no: EM132274968

Questions Cloud

Who are the syncopated ladies : How have the Syncopated ladies use art (tap dancing) to raise awarness to social causes? Who are the Syncopated ladies? Who are some of their corporate.
Describe what is meant by the phrase : Use Mishkin and Duffie to describe what is meant by the phrase "shadow banking system" and explain why it is important to monetary policy today.
What is the significance of the images presented : What does or does not make them Imagist poems? What is the significance of the images presented?
Should the ethical quest for good political life be guided : Should the ethical quest for the good political life be guided by a philosophical, religious, or scientific concern for the highest truth?
Example of negative externality : Disposing of coffee pods is an example of negative externality. Left unregulated the equilibrium price is $5 and quantity is 5.
The differences between european and native american world : Discuss and analyze the fundamental differences between European (i.e. Spanish and English) and Native American (i.e. American Indian) worlds.
Call option for may on a eurodollar time : Suppose that, in March, you hold a call option for May on a eurodollar time deposit at 6 percent. If the interest rate in May is 5 percent, would you exercise
What do you see as the biggest threat to the world today : What do you see as the biggest threat to the world today (i.e. nuclear war, climate change, depletion of natural resources, etc.) and why? Your response should.
Prepare a paper regarding canada post strike : You need to prepare a 700-750 paper regarding canada post strike

Reviews

Write a Review

Business Economics Questions & Answers

  Estimate the probability that the grade

A random sample of 10 examination papers in a course, which was given on a pass or fail basis, showed the following

  1 if you are the chief economist of a country experiencing

1. if you are the chief economist of a country experiencing high unemployment and flat gdp what macroeconomic policies

  Compare the deadweight loss

The Shakespeare Theatre has a monopoly on productions of Othello in Washington, DC. They hire you to analyze whether o?ering a “young adult” discount could help increase pro?ts. After some economic analysis, you discover that the demand curve for Oth..

  What is implicit cost of production per year

Charles has decided to open a lawn-mowing company. To do so, he purchases mowing equipment for $5,000, buys gasoline ($2.30 in gas is required to mow each yard), and pays a helper $10.00 per yard. Prior to opening the lawn company, Charles earned $8,..

  Marginal revenue function of a monopolist

Suppose the marginal revenue (MR) function of a monopolist is 5000-0.25Q, what is the profit maximizing price and quantity? Show or identify the demand, marginal revenue and total revenue curves. State the maximum amount of total revenue—in US dollar..

  Probability in the frequentist sense

Come up with a scenario (other than those brought up in class) in which it makes sense to talk about probability in the Frequentist sense.

  Identify the different stages of the business cycle

Using the graph below, identify the different stages of the business cycle. Assume that A, B, and C represent consecutive years.

  Innovations in intermodal transportation

The US government should be the catalyst for innovations in intermodal transportation. Industry, in a free market economy,

  What price will the manufacturer charge to the retailer

Suppose a manufacturer is a monopoly. This manufacturer produces a good at MC = 4 and sells it to a retailer. The manufacturer has no fixed costs. The retailer is also a monopoly, and it sells the good bought from the manufacturer to consumers.

  What amount should the estate receive

What amount should the estate receive for lost income and benefits using an interest rate of 8%?

  What is the percent change in the equilibrium wage

In the city of Growville, the equilibrium employment is 100,000 workers, and the equilibrium wage is $80 per day. The elasticity of demand for labor is 1.0 (in absolute value) and the elasticity of supply of labor is 4.0. The employment multiplier is..

  Most accurate statement

Which of the following is the most accurate statement? Americans are very willing to buy domestically produced goods, even if there are more expensive than imported goods. We import more foreign goods than we did 40 years ago, but the merchandise imp..

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!

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