Legislation for stricter fuel economy standards for new cars produced in the United States will benefit each resident by $50 (lower transportation costs, cleaner air, etc.) for well over $15 trillion dollars in aggregate benefits. The cost of the legislation to domestic auto manufacturers will be $500 million. According to Special Interest Politics, since the benefits of the legislation clearly outweigh the costs, the policy will easily pass with little opposition. A. True B. False
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1. Legislation for stricter fuel economy standards for new cars produced in the United States will benefit each resident by $50 (lower transportation costs, cleaner air, etc.) for well over $15 trillion dollars in aggregate benefits. The cost of the legislation to domestic auto manufacturers will be $500 million. According to Special Interest Politics, since the benefits of the legislation clearly outweigh the costs, the policy will easily pass with little opposition.
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- 2. The table below shows hypothetical demand and supply schedules for cigarettes in the absence of government intervention. a. Draw a diagram showing demand (Do), supply (S,), and equilibrium price and quantity in the market before government intervention. b. Government policy-makers estimate that the spillover costs associated with cigarette smoking are an extra $2 for each pack sold. Outline the nature of these spillover costs in the case of cigarette smoking. c. Using the estimate from part b, draw a new supply curve (S,) on your graph that incorporates both private and public costs of producing and consumingVan, Amy, and Carlos are the only voters in a small society and are considering whether to publicly finance a project. Indicate in the following table what each individual's vote would be and whether the public project will be funded. Name Marginal Cost Marginal Benefit Vote Van $300 $10 Amy $300 $305 Carlos $300 Total $900 $345 $660 If this same project were taking place in the private sector, a firm fund the project. In private markets, decisions to provide goods or services to the market are generally made if marginal benefits comparison, the decisions to provide goods and services by governments are made through may approve projects whose costs their benefits. marginal costs. In . As a result, governmentsKindly assist with the above two questions. 1) Besides raising revenue, what is the most likely goal of government that enacts a per unit tax. a) to increase market competition. b) to correct for a positive externality c) to correct for a negative externality d) to encourage production of private goods. e) to increase profit and encourage production. 2) Country A can produce a gadget at a lower cost than any other producer of gadgets. As a result , Country A must have. a) a superior gadget making technology b) an absolute advantage gadget production . c) a comparative advantage in gadget production. d) a constant opportunity cost associated with gadget production e) more factors of production devoted to gadget production than any other country.
- Question 42 Assume that the table below shows the cost/benefit schedule in a four-voter town for the purchase of a new street light. Voter Benefits Tax Smith $466 $300 Jones $320 $300 Brown $302 $300 Doe $3 $300 Will this project be approved? By how many votes will it win/lose? O No, by a vote of 1 Yes - 3 No O It's a tie: 2 Yes - 2 No O Yes, by a vote of 3 Yes - 1 No O Yes, by unamimous voteDistinguish between a carbon-tax and a cap-andtrade strategy for reducing carbon dioxide and other so-called greenhouse gases (that are believed by many scientists to be causing global warming). Which of the two strategies do you think would have the most political support in an election in your home state? Explain your thinking.We have seen that monetizing the benefits of environmental improvements is difficult. Consequently, some researchers have argued that policymakers themselves should determine the goals of environmental policies in terms of how much pollution abatement is necessary, and then market-based environmental policy tools should be used to achieve such goals in a cost-effective manner. Examples of such market-based tools include all of the following except ____. A. Pollution Taxes B. Abatment Subsidies C. Command and Control Policies Please Answer Correctly Will Rate IF Correct!
- 9. Assume that the city government of Pollutersville taxes the production of electricity in an effort to make the market internalize the external cost imposed on society in the form of air pollution that is created when coal is burned to produce electricity. a. Draw a supply and demand diagram for electricity in Pollutersville. Be sure to label your axes, curves, and intercepts, as well as MSC, MSB, MPC, MSB curves and the amount of the tax. b. If the government imposes a tax equal to the amount of the marginal external cost generated by each kwh of electricity, is there any deadweight loss in the market? Explain in one sentence of less. C. Discuss the changes in welfare for consumers, producers, society, and those individuals affected by the pollution once the tax is imposed. 42. Suppose that there are 1,000 voters in your city. A total of 400 are willing to pay up to $25 each for the construction of a park, and the other 600 are willing to pay only $10. The construction of the park will cost $12,000. Someone proposes a vote on whether to tax each citizen $12 in order to finance the park. (a) What will be the result according to the median voter model? Is this result socially efficient? Explain. (b) What if instead of being willing to pay up to $25 each, the 400 residents were willing to pay up to $50 each?1. Shortly explain the relationship between elasticity of a good and the consumption tax rate it should be imposed upon it. 2. What do we man by rivalry of a good? Give examples of rival and non-rival goods. To what extent is rivalry a crucial aspect of a public good?
- 1. What is the difference between private and social costs?2. How can the government intervene to force consumers to internalize external costs associated with: a. negative externalities? b. positive externalities?3. Differentiate between public good and common resources.4. What are the advantages of a flat tax system?1. How did Covid-19 affect businesses and the overall economy? 2. Governments and pharmaceutical companies rushed quickly ahead to develop a vaccine. Vaccinations and immunizations are examples of positive externalities. A positive externality is when an activity creates a benefit for those who are not involved in the transaction, a third party. Let’s examine the vaccination of Covid-19 as a positive externality. Question: Why is the Covid-19 vaccination considered a positive externality? 3. Market supply curve S and private demand curve Dp represent the market for vaccinations. Equilibrium is at point e, and the number of people getting the vaccination is Qe. Society would benefit, however, if more people would get the vaccination. Demand curve DS represents the marginal social benefit (MSB), which includes the private demand for vaccinations plus the external benefits that flow from it. Socially optimal enrollment would be Q1 (point f). Society would benefit the most by…Lindahl taxes charge each consumer ___________________ and result in ___________________ of a public good. Her/his own Marginal benefit from consuming the public good; underprovision; Her/his own Marginal benefit from consuming the public good; efficient provision; Minimum marginal benefit from the public good among all consumers; efficient. Minimum marginal benefit from the public good among all consumers; underprovision.