skip to Main Content
The smarter way
to do assignments.

Please note that this is just a preview of a school assignment posted on our website by one of our clients. If you need assistance with this question too, please click on the Order button at the bottom of the page to get started.

1. If the production and sale of a good causes a positive
externality, the total profits of buyers and sellers are maximized
by a competitive equilibrium.
 
2. If the production and sale of a good causes a negative
externality, a tax on the sale of that good can increase total
profits.
 
3. Residents of the town of Los Locos (population 100) like to
drive noisy offroad vehicles, but they hate the disturbance and
dust caused by each others’ vehicles. Each vehicle that is
purchased by a resident causes $20 worth of damage to each of the
100 residents. There are 20 residents who are willing to pay up to
$4,000 for an offroad vehicle. There are 30 residents who are
willing to pay up to $3,000 for an offroad vehicle and there are 50
residents who are willing to pay up to $2,500 for an offroad
vehicle. The price of offroad vehicles is $1,200. In the absence of
any governmental interference, how many residents of Los Locos
would buy offroad vehicles?
(a) 0
(b) 20
(c) 50
(d) 80
(e) 100
4. In the town of Los Locos described in question 3, how many
residents would support a ban on offroad vehicles?
(a) 0
(b) 20
(c) 50
(d) 80
(e) 100
5. Suppose that the town of Los Locos imposes a tax of $2,000 on
every resident who buys an offroad vehicle and the town distributes
the revenues collected from the tax equally among all residents of
Los Locos. With the tax in place, how many people in Los Locos will
buy offroad vehicles and how much tax revenue will the government
distribute to each resident?
(a) 50 residents will buy offroad vehicles and each resident
will get a rebate
of 1,000.
(b) 20 residents will buy offroad vehicles and each resident
will get a rebate
of $400.
(c) Nobody will buy an offroad vehicle and there will be no
rebates.
(d) Everybody will buy an offroad vehicle and everyone will get
a rebate of
$2,000.
(e) None of the above.
6. The residents of Los Locos decided to vote on whether to
impose a tax
of $2,000 on each offroad vehicle purchaser. Who would gain and
who
would lose from the tax on offroad vehicles?
(a) The residents with $2,500 buyer values would be better off
and the other
residents would be worse off.
(b) Every resident would be worse off.
(c) The residents with $4,000 buyer values would be better off
and the other
residents would be worse off.
(d) The residents with $4,000 buyer values would be just as well
off and
other residents would be better off.
(e) The residents with $4,000 buyer values would be worse off,
the
residents with $3,000 buyer values would be exactly as well off,
and the
residents with $2,500 buyer values would be better off.
7. Sweet Harmony, Oregon has 100 families. Forty of those
families have a
child, and 60 do not. Twenty of the families with a child are
willing to pay
as much as $6,000 to educate their child, and the other twenty
are willing to
pay as much as $4,000. Each educated child creates a positive
externality
of $25 for each family in Sweet Harmony. The cost of educating a
child is
$5,000. If each family must pay the cost of educating its child,
what is the
total profit all families derive from the education of Sweet
Harmony’s
children?
(a) $30,000
(b) $40,000
(c) $70,000
(d) $100,000
(e) $120,000
8. The town council of Sweet Harmony is considering a proposal
to
provide a free public education to all children in the town. The
total cost of
this proposal would be $200,000 ($5,000×40). To finance this
cost, the
council would tax each family $2,000. If this proposal were
enacted, what
 
would be the total profit to the residents of Sweet Harmony from
educating
its children?
(a) $30,000
(b) $40,000
(c) $70,000
(d) $100,000
(e) $120,000
9. If the proposal for free public schools in Sweet Harmony were
put to a
vote, how many families would vote in favor of it?
(a) 20
(b) 40
(c) 60
(d) 80
(e) 100
10. Another proposal is to pay each family a subsidy $1,200 if
they pay for
their child’s education. The school would still cost each family
$5,000 for a
net cost after the subsidy of $3,800. The subsidy would be
financed by a
tax on residents. How many families would favor this proposal
over the
status quo described in question 7?
(a) 20
(b) 40
(c) 60
(d) 80
(e) 100
 

GET HELP WITH THIS ASSIGNMENT TODAY

Clicking on this button will take you to our custom assignment page. Here you can fill out all the additional details for this particular paper (grading rubric, academic style, number of sources etc), after which your paper will get assigned to a course-specific writer. If you have any issues/concerns, please don’t hesitate to contact our live support team or email us right away.

How It Works        |        About Us       |       Contact Us

© 2018 | Intelli Essays Homework Service®

Back To Top