Questions from General Economics

Q: Greater consumption of alcohol leads to more motor vehicle accidents and,

Greater consumption of alcohol leads to more motor vehicle accidents and, thus, imposes costs on people who do not drink and drive. a. Illustrate the market for alcohol, labeling the demand curve, the...

Q: Many observers believe that the levels of pollution in our society are

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...

Q: The many identical residents of Whoville love drinking Zlurp. Each resident

The many identical residents of Whoville love drinking Zlurp. Each resident has the following willingness to pay for the tasty refreshment: First ………..bottle $5 Second…….. bottle 4 Third ………..bottle 3...

Q: Ringo loves playing rock ‘n’ roll music at high volume.

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...

Q: Figure 4 shows that for any given demand curve for the right

Figure 4 shows that for any given demand curve for the right to pollute, the government can achieve the same outcome either by setting a price with a corrective tax or by setting a quantity with pollu...

Q: Suppose that the government decides to issue tradable permits for a certain

Suppose that the government decides to issue tradable permits for a certain form of pollution. a. Does it matter for economic efficiency whether the government distributes or auctions the permits? Why...

Q: There are three industrial firms in Happy Valley. /

There are three industrial firms in Happy Valley. The government wants to reduce pollution to 120 units, so it gives each firm 40 tradable pollution permits. a. Who sells permits and how many do the...

Q: Consider two ways to protect your car from theft. The Club

Consider two ways to protect your car from theft. The Club (a steering wheel lock) makes it difficult for a car thief to take your car. Lojack (a tracking system) makes it easier for the police to cat...

Q: Consider the market for fire extinguishers. a. Why might

Consider the market for fire extinguishers. a. Why might fire extinguishers exhibit positive externalities? b. Draw a graph of the market for fire extinguishers, labeling the demand curve, the social-...

Q: A local drama company proposes a new neighborhood theater in San Francisco

A local drama company proposes a new neighborhood theater in San Francisco. Before approving the building permit, the city planner completes a study of the theater’s impact on the surrounding communit...