Individuals go for flu injection not only protect themselves against flu but also help to prevent the disease from spreading in the community. (a) What type of externality occurs in the flu injection market? (b) Is the market outcome efficient? (c) What can the government do to rectify the externality issue?
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Individuals go for flu injection not only protect themselves against flu but also help to prevent the disease from spreading in the community.
(a) What type of externality occurs in the flu injection market?
(b) Is the
(c) What can the government do to rectify the externality issue?
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- Consider an economy which is heavily dependent on tourism. To boost tourist revenue, the government has decided to reclaim the sea to build a theme park at the coastal area. This has resulted in sea pollution, reduces the fish stock and threaten the livelihoods of fishermen in the vicinity. (a)Describe the type of externality exist in the scenario. Explain with a suitable diagram and highlight the area of the efficiency loss. (b)Explain the remedial action to rectify the externality problem.When externalities cause markets to be inefficient (x) government action is sometimes needed to solve the problem. (y) private solutions can be developed to solve the problem. (z) there is a way to eliminate the problem of externalities in the market if producers are provided with the appropriate incentives to internalize the externality. Select one or more: a. (x), (y) and (z) b. (x) and (y) only c. (x) and (z) only d. (y) and (z) only e. (z) onlyIf the market for a good is producing a negative externality in production (e.g. a polluting firm):(a) In market equilibrium, the marginal cost (MC) to society exceeds the marginal cost (MC) of production.b) In market equilibrium the marginal benefits to society exceed the marginal cost (MC) of production.(c) In market equilibrium the marginal costs (MC) to society exceed the total benefits to societyd) In market equilibrium the private Cmg (MC) of production exceeds the Cmg (MC) for society.For each of the alternatives, explain which is correct and explain which are false or uncertain.
- Identify a positive externalitydont use chatgpt answer urgent In a situation where an externality occurs, the "third party" refers to those who a) buy the product from others. b) produce the product for others. c) trade the product with others outside the nation or community. d) are not directly involved in the transaction or activity.(a) Explain the difference between a positive externality and a negative externality and why each result in an equilibrium point that is not optimal for society. (b) which externality results in an equilibrium quantity that is higher than the optimal social quantity of a good? (c) how can the impact of the externality in part b be corrected?
- Identify a newspaper article that illustrates a market failure in your assignedCaribbean country. Ensure that you provide a screenshot of the article in your submission. NOTE: Only the following market failures should be examined: public good, asymmetric information, positive or negative externality. (i) Provide a brief summary of the main points in the article. (Maximum 30 words) (ii)Identify the type of market failure being discussed in the article and discuss why market failure occurs in this scenario. (iii) Suggest a relevant government policy that would yield the efficient outcome andcarefully explain the process through which the implementation of the government policy will lead to the optimal outcome. (Maximum 30 words) (iv) How will the imposition of the chosen government policy impact consumer surplus, producer surplus and total surplus in this scenario? (Maximum 30 words)In the case of a positive externality that is generated in a good production process, the main issue will be: a. That consumers will be negatively affected. b. That there will be too much production of it. c. That there will be not enough production of it. d. That there will be no policy solution to it.(a) Explain what is meant by command-and-control in terms of a demand side climate change policy. What are the pros and cons of this as a poliey option? (b) Using a diagram, explain how a carbon tax could help reduce pollution. (c) Using a diagram or diagrams, explain how a cap-and-trade scheme could result in pollution reduction.
- The socially optimal outcome is the outcome that: Select one: a. has the most externalities. b. is most efficient for society as a whole, including for buyers, sellers, and bystanders. c. has the most benefits for society as a whole, regardless of the costs involved. d. benefits the largest number of people.In the article Examine the following market failures: public good, asymmetric information, positive or negative externality. (i) identify the type of market failure being discussed in the article and discuss why market failure occurs in this scenario.c) External costs in T-shirt production According to the World Wildlife Fund (WWF), it takes 2700 litres of water to produce one T-shirt. Water is used not only to grow cotton but also to dye clothing. Cotton growers use pesticides and chemicals that pollute the water. The pesticides and chemicals that remain in the environment harm animals and plant life. The WWF has been working with governments to help reduce this pollution. It advises them to introduce more regulation and to fine companies that pollute. Clothing manufacturers argue that this will add to their costs and mean they will supply less. This may mean they employ fewer people and will help reduce water pollution as less clothing is being manufactured. Fines will punish those that pollute while also earning the government revenue it can use to clean up the pollution. The fines must also be large enough to persuade firms to stop polluting. With reference to the information given in *External costs in T-shirt production' and…
