Principles of Macroeconomics

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Unformatted text preview: Econ 101: Principles of Microeconomics NAME: Korinna K. Hansen Disc. Section: Practice Quiz 12 In solving this problem make sure that you meeent clear, well labeled graphs that incorporate all the information you are given. You can use'the backofthispogeas scrap. [will not Iookatthe beckwhen grading this quiz, so you should present your complete answer by the question. No long full sentences are required for this quiz. 1. (5 points) Consider the production of steel - which releases pollutants into the atmosphere. In the graph below present the marginal private coet (MPG), marginal social cost (MSG), marginal private benefits (MPH), and marginal social benefits (M83) in steel production. Indicate the market equilibrium at price P1 and quantity Q1 . Show the efficient level of omPut at quantity Q2. ”ASC- mic. MP5=MC5 Q Exactly how high ofa tax (or subsidy) will bring abom‘eaegsixiauy efficient result? {- W 7101‘ 'HM- MP-c +ob¢4fi5wn M5ch in the’iobove fin him the new price: P2 that consumers ould pay, and P3 that steel ucers would receive. 2. (5 points) Consider the existence of higher education and its multiple benefits to society at large. In the graph below preemt the marginal private cost (MPG), marginal social cost (MSG), marginal private benefits (MP3), and marginal social benefits (MSB) for higher education. Indicate the market equilibrium at price PI and quantity Q1. Show the efficient level of output at quantity Q2. M1909 M9; I l 1 MP ) Exactly how high ofatax(or subsi )will bring tth tensity efiicientresult? Q Waco—1 W? fUF'fdrw. MP3 M “d" Indie-abovegmph, showthenew pricesP3 that students pay,and P2that CollogesandUniver-siti'es receive. ...
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