ECON LESSON 8.1 - 8.2
Where P0 = $10, P1 = $40, P2 = $15, P3 = $20, P4 = $25, P5 = $30, P6 = $35, Q0 = 50, and Q1 = 80. What is the dead weight loss if the market does internalize the externalities? (Do not include the dollar sign $ in your answer)
0
Where P0 = $5, PS,0 = $8, PS,1 = $11, P* = $14, PB,1 = $16, PB,0 = $18 P1 = $20, Q0 = 40, Q1 = 80, and Q* = 120. What is the dead weight loss if there are no transaction costs? (Do not include the dollar sign $ in your answer))
0
Where P0 = $6, P1 = $18, P2 = $8, P3 = $10, P4 = $12, P5 = $14, P6 = $16, Q0 = 200, and Q1 = 300. What is the marginal cost of the 200th unit produced? (Do not include the dollar sign $ in your answer)
10
Where P0 = $6, P1 = $18, P2 = $8, P3 = $10, P4 = $12, P5 = $14, P6 = $16, Q0 = 200, and Q1 = 300. What is the price at which all exchanges take place if the market does not internalize the externalities? (Do not include the dollar sign $ in your answer)
10
Where P0 = $5, PS,0 = $8, PS,1 = $11, P* = $14, PB,1 = $16, PB,0 = $18 P1 = $20, Q0 = 40, Q1 = 80, and Q* = 120. What is the gains from trade if there is a $10 per unit transaction cost? (Do not include the dollar sign $ in your answer)
100
Where P0 = $5, PS,0 = $8, PS,1 = $11, P* = $14, PB,1 = $16, PB,0 = $18 P1 = $20, Q0 = 40, Q1 = 80, and Q* = 120. What is the price the seller faces if there is a $5 per unit transaction cost? (Do not include the dollar sign $ in your answer)
11
Where P0 = $6, P1 = $18, P2 = $8, P3 = $10, P4 = $12, P5 = $14, P6 = $16, Q0 = 200, and Q1 = 300. What is the price at which all exchanges take place if the market does internalize the externalities? (Do not include the dollar sign $ in your answer)
12
Where P0 = $5, PS,0 = $8, PS,1 = $11, P* = $14, PB,1 = $16, PB,0 = $18 P1 = $20, Q0 = 40, Q1 = 80, and Q* = 120. What is the quantity exchanged if there are no transaction costs?
120
Where P0 = $5, PS,0 = $8, PS,1 = $11, P* = $14, PB,1 = $16, PB,0 = $18 P1 = $20, Q0 = 40, Q1 = 80, and Q* = 120. What is the price at which all trades take place if there are no transaction costs? (Do not include the dollar sign $ in your answer)
14
Where P0 = $6, P1 = $18, P2 = $8, P3 = $10, P4 = $12, P5 = $14, P6 = $16, Q0 = 200, and Q1 = 300. What is the marginal social benefit of the 200th unit consumed? (Do not include the dollar sign $ in your answer)
14
Where P0 = $5, PS,0 = $8, PS,1 = $11, P* = $14, PB,1 = $16, PB,0 = $18 P1 = $20, Q0 = 40, Q1 = 80, and Q* = 120. What is the price the buyer faces if there is a $5 per unit transaction cost? (Do not include the dollar sign $ in your answer)
16
Where P0 = $5, PS,0 = $8, PS,1 = $11, P* = $14, PB,1 = $16, PB,0 = $18 P1 = $20, Q0 = 40, Q1 = 80, and Q* = 120. What is the price the buyer faces if there is a $10 per unit transaction cost? (Do not include the dollar sign $ in your answer)
18
Where P0 = $6, P1 = $18, P2 = $8, P3 = $10, P4 = $12, P5 = $14, P6 = $16, Q0 = 200, and Q1 = 300. How many units are exchanged if the market does not internalize the externalities?
200
Where P0 = $10, P1 = $40, P2 = $15, P3 = $20, P4 = $25, P5 = $30, P6 = $35, Q0 = 50, and Q1 = 80. What is the price all exchanges take place at if the market does not internalize the externalities? (Do not include the dollar sign $ in your answer)
25
Where P0 = $10, P1 = $40, P2 = $15, P3 = $20, P4 = $25, P5 = $30, P6 = $35, Q0 = 50, and Q1 = 80. What is the privately optimal exchange price?
25
Where P0 = $10, P1 = $40, P2 = $15, P3 = $20, P4 = $25, P5 = $30, P6 = $35, Q0 = 50, and Q1 = 80. What is the marginal social cost of the 50th unit produced? (Do not include the dollar sign $ in your answer)
30
Where P0 = $10, P1 = $40, P2 = $15, P3 = $20, P4 = $25, P5 = $30, P6 = $35, Q0 = 50, and Q1 = 80. What is the socially optimal exchange price
30
Where P0 = $10, P1 = $40, P2 = $15, P3 = $20, P4 = $25, P5 = $30, P6 = $35, Q0 = 50, and Q1 = 80. What is the socially optimal exchange price?
30
Where P0 = $5, PS,0 = $8, PS,1 = $11, P* = $14, PB,1 = $16, PB,0 = $18 P1 = $20, Q0 = 40, Q1 = 80, and Q* = 120. Suppose there is a $10 per unit transaction cost. An intermediary enters the market and reduces the transaction cost to $5 per unit. By how much did this intermediary add to gains from trade?
300
Where P0 = $6, P1 = $18, P2 = $8, P3 = $10, P4 = $12, P5 = $14, P6 = $16, Q0 = 200, and Q1 = 300. How many units are exchanged if the market does internalize the externalities?
300
Where P0 = $5, PS,0 = $8, PS,1 = $11, P* = $14, PB,1 = $16, PB,0 = $18 P1 = $20, Q0 = 40, Q1 = 80, and Q* = 120. What is the consumer surplus if there are no transaction costs? (Do not include the dollar sign $ in your answer)
360
Where P0 = $5, PS,0 = $8, PS,1 = $11, P* = $14, PB,1 = $16, PB,0 = $18 P1 = $20, Q0 = 40, Q1 = 80, and Q* = 120. What is the consumer surplus if there is a $10 per unit transaction cost? (Do not include the dollar sign $ in your answer)
40
Where P0 = $5, PS,0 = $8, PS,1 = $11, P* = $14, PB,1 = $16, PB,0 = $18 P1 = $20, Q0 = 40, Q1 = 80, and Q* = 120. What is the quantity exchanged if there is a $10 per unit transaction cost?
40
Where P0 = $5, PS,0 = $8, PS,1 = $11, P* = $14, PB,1 = $16, PB,0 = $18 P1 = $20, Q0 = 40, Q1 = 80, and Q* = 120. What is the gains from trade if there is a $5 per unit transaction cost? (Do not include the dollar sign $ in your answer)
400
Where P0 = $5, PS,0 = $8, PS,1 = $11, P* = $14, PB,1 = $16, PB,0 = $18 P1 = $20, Q0 = 40, Q1 = 80, and Q* = 120. What is the revenue earned by the intermediary if there is a $5 per unit transaction cost? (Do not include the dollar sign $ in your answer)
400
Where P0 = $10, P1 = $40, P2 = $15, P3 = $20, P4 = $25, P5 = $30, P6 = $35, Q0 = 50, and Q1 = 80. What is the socially optimal quantity exchanged?
50
Where P0 = $5, PS,0 = $8, PS,1 = $11, P* = $14, PB,1 = $16, PB,0 = $18 P1 = $20, Q0 = 40, Q1 = 80, and Q* = 120. What is the producer surplus if there are no transaction costs? (Do not include the dollar sign $ in your answer)
540
Where P0 = $5, PS,0 = $8, PS,1 = $11, P* = $14, PB,1 = $16, PB,0 = $18 P1 = $20, Q0 = 40, Q1 = 80, and Q* = 120. What is the producer surplus if there is a $10 per unit transaction cost? (Do not include the dollar sign $ in your answer)
60
Where P0 = $10, P1 = $40, P2 = $15, P3 = $20, P4 = $25, P5 = $30, P6 = $35, Q0 = 50, and Q1 = 80. How many units are exchanged if the market does not internalize the externalities?
80
Where P0 = $10, P1 = $40, P2 = $15, P3 = $20, P4 = $25, P5 = $30, P6 = $35, Q0 = 50, and Q1 = 80. What is the privately optimal quantity exchanged?
80
Where P0 = $5, PS,0 = $8, PS,1 = $11, P* = $14, PB,1 = $16, PB,0 = $18 P1 = $20, Q0 = 40, Q1 = 80, and Q* = 120. What is the quantity exchanged if there is a $5 per unit transaction cost?
80
Transaction costs impose a burden on buyers and sellers, made visible by the consumer and producer surplus they respectively lose when a transaction cost exists. What determines who bears a larger share of the burden?
Relative elasticity; if for example demand is relatively more inelastic than supply, buyers are relatively less price-sensitive, and thus will experience a large increase in the price they face, compared to a smaller decrease in the price sellers face.
Which of the following is NOT a possible solution to the problem of pollution? Subsidizing the costs of production of activities that generate pollution Imposing a pollution tax on producers Converting a resource that is communally owned into a privately owned resource Regulating the quantity of pollution that can be generated
Subsidizing the costs of production of activities that generate pollution
Refer to the above figure. It represents supply and demand for The Black Ash Steel Company's output. The firm's plant belches large quantities of smelly fumes and black ash into the air. Residents in the surrounding area have higher medical bills as a result. If the firm is forced to pay the full social cost of its production, what will occur?
The company's supply curve will shift from S B to S A.
If there are transaction costs in the market for good X, should the market welcome intermediaries?
Yes; both consumers and producers stand to benefit from an intermediary who can reduce transaction costs.
The social costs of an activity are greater than the private costs of the activity when
a person does not pay all costs associated with a particular resource-using activity.
What does the phrase "internalizing an external cost" mean?
forcing producers to factor into their production costs the cost of the externalities created in the production of their output
The Black Ash Steel Company's plant belches large quantities of noxious fumes and black ash into the air. Residents in the surrounding area have higher medical bills because of Black Ash's pollution. As long as Black Ash is allowed to emit pollution and ignore any externalities, the firm will
overproduce
In the market for good X, there exists an organization that facilitates exchange. This organization
serves as an intermediary in the market for good X.
Ethan is trying to build a graph of supply and demand for the market for couches. Theo says that his maximum buying price for a couch is $400, but when Ethan offers Theo a nice couch in perfect condition for $400, Theo does not want to purchase it. This most directly suggests that
there are hidden transaction costs, e.g. picking up the couch or shipping it to Theo's house, that make the couch more expensive than the stated price of $400.
If transaction costs exist, how do intermediaries earn revenue?
they reduce transaction costs, increasing the consumer and producer surplus of anyone who uses the intermediary.
Buyers will face a different price than sellers when
transaction costs are not zero.
All the costs associated with making, reaching, and enforcing agreements are called
transaction costs.
