What kind of externality is this why this is a

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streets, an estimated benefit to the community of $2 per ticket. What kind of externality is this? Why? This is a positive externality because the social value of theater tickets is greater than the private value in this case d. On a new graph, illustrate the market for theater tickets in the case of these two externalities. Again, label the demand curve, the social-value curve, the supply curve, the social-cost curve, the market equilibrium level of output, the efficient level of output, and the per-unit amount of both externalities. The figure shows both the positive and the negative externalities e. Describe a government policy that would result in an efficient outcome. A tax of $3 per ticket will lead to the efficient outcome. The market equilibrium quantity will be equal to the social optimum 5. Many observers believe that the levels of pollution in our society are too high.
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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? It is efficient to have different amounts of pollution reduction at different firms because the costs of reducing pollution differ across firms. If all firms were made to reduce pollution by the same amount, the costs would be low at some firms and prohibitively high at others, imposing a greater burden overall b. Command-and-control approaches often rely on uniform reductions among firms. Why are these approaches generally unable to target the firms that should undertake bigger reductions? Command-and-control approaches that rely on uniform pollution reduction among firms give the firms no incentive to reduce pollution beyond the mandated amount. Instead, every firm will reduce pollution by just the amount required and no more. c. Economists argue 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? Corrective taxes or tradable pollution rights give firms greater incentives to reduce pollution. Firms are rewarded by paying lower taxes or spending less on permits if they find methods to reduce pollution, so they have the incentive to engage in research on pollution control. The government does not have to figure out which firms can reduce pollution the most it lets the market give firms the incentive to reduce pollution on their own 6. Ringo loves playing rock ‘n’ roll music at high volume. Luciano loves opera and hates rock ‘n’ roll. Unfortunately, they are next-door neighbors in an apartment building with paper-thin walls. a. What is the externality here? The externality is noise pollution. Ringo’s consumption of rock and roll music affects Luciano, but Ringo does not consider that in deciding how loudly he plays his music b. What command-and-control policy might the landlord impose? Could such a policy lead to an inefficient outcome?
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