Practice quiz12 solution

# 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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• Spring '07
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