3. Greater consumption of alcohol leads to more motor vehicle accidents and, this, imposes costs on people who do not drink and rive. a.illustrate the market for alcohol, labeling the demand curve, the social-value curve, the supply curve, the social-value curve, the supply curve, the social-value curve, the market equilibrium level of output, and the efficient level of output.b.On your graph, shade the area corresponding to the deadweight loss of the market equilibrium. (Hint: The deadweight loss occurs because some units of alcohols are consumed for which the social cost exceeds the social value.) Explain.
4. Many observers believe that the levels of pollution in our society are too high. a.If society wishes to reduce overall pollution by a certain amount, why is it efficient to have different amounts of reduction at different firms?b.Command-and-control approaches often rely on uniform reductions among firms. Why are thesis approaches generally unable to target the firms that should undertake bigger reductions?c.Economists are that appropriate corrective taxes or tradable pollution rights will result in efficient pollution reduction. How do these approaches target the firms that should undertake bigger reductions?< Chapter 11 #1, 2, 3, 4, 5 >1.Think about the goods and services provided by your local government.a.Using the classification in Figure 1, explain which category each of the following goods falls in to:From the information given above, the following goods can be categorized into categories given below:
You've reached the end of your free preview.
Want to read all 6 pages?
- Fall '15
- Economics, Market failure, Externality, LoJack, Fredo, Orson, Education- Public Good