hw5 - a On your graph what area represents the total...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Economics 108 Landsburg Homework #5 week of 10/16/06 RECOMMENDED READING: Chapter 10. 1. The Nabisco cookie factory emits wonderful aromas that enhance the lives of everyone walking past. Use a graph to illustrate the private marginal value of Nabisco cookies (that is, the value to the people who eat them) and the social marginal value of the same cookies (that is, the sum of the values to the people who eat them and the people who smell them as they’re being baked).
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: a) On your graph, what area represents the total positive externality? b) What area on your graph represents welfare? c) What area on your graph represents the additional welfare that could be generated if Nabisco produced one more cookie? d) If the next cookie is worth more than it costs to bake, why won’t Nabisco bake it? 2. Do Chapter 10, problem 1. 3. Do Chapter 10, problem 3. 4. Do Chapter 10, problem 6....
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online