A small town provides a fireworks display, which is a public good, every fourth of July. For simplicity, assume the town only has two residents: Hayden and Madison. Their demands for the fireworks display are illustrated in the figure. Determine the market demand curve for this public good. The market demand curve should be downward sloping. In this example, the market will demand 2 fireworks at a price of and the market will demand 14 fireworks at a price of (Enter your responses rounded to two decimal places.) Price (dollars per firework) 8.00- 7.50- 7.00- 6.50- 6.00- 5.50- 5.00- 4.50 4.00- 3.50- 3.00- 8 2.50 à 2.00 1.50- 1.00- 0.50- 0.00+ Madison Hayden 2 10 12 Quantity (number of fireworks) 14 16

A small town provides a fireworks display, which is a public good, every fourth of July. For simplicity, assume the town only has two residents: Hayden and Madison. Their demands for the fireworks display are illustrated in the figure. Determine the market demand curve for this public good. The market demand curve should be downward sloping. In this example, the market will demand 2 fireworks at a price of and the market will demand 14 fireworks at a price of (Enter your responses rounded to two decimal places.) Price (dollars per firework) 8.00- 7.50- 7.00- 6.50- 6.00- 5.50- 5.00- 4.50 4.00- 3.50- 3.00- 8 2.50 à 2.00 1.50- 1.00- 0.50- 0.00+ Madison Hayden 2 10 12 Quantity (number of fireworks) 14 16

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which statement about externalities is wrong? O Markets are typically not efficient in dealing with externalities O Externalities can be positive or negative O A firm naturally takes into account negative externalities that result from their production O Interventions such as carbon taxes can help correct externalities gative externalities imply that the social cost is high than the internal (or private) cost
Viral infections such as flu are highly contagious. The number of infections and thus the spread of the disease can be prevented by getting vaccinated. However, the decision to take vaccine is voluntary and some people choose not to go for it for various reasons.] [What type of externality occurs by getting vaccinated against contagious diseases? Explain your answer in 100 words or less. [In a diagram, show the market equilibrium quantity of the vaccine. Is the quantity also socially efficient? Explain in 100 words or less and demonstrate using the same diagram. [Suggest one method to achieve a socially efficient outcome. Explain your answer in 100 or less words.
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An increase in globalization has lead to an increase in pollution, and this is a problem because pollution is seen to be the classic example of a This is a that individuals impose on others but do not pay for. O negative externality, cost O possitive externality, benefit O negative externality, benefit O possitive externality, cost
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