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For the next 4 questions, use the following scenario: The first table presents a polluting firm’s private benefit/cost functions and social benefit/cost functions. The second table presents four scenarios of the tradeable pollution permits market. Production Quantity MSB=MPB   MPC   MSC 1 $60 $15 $45 2 55 25 55 3 50 35 65 4 45 45 75 5 40 55 85 6 35 65 95 7 30 75 105     Tradable Pollution Permit Scenarios Firm’s endowment of Permits Market Price per Permit Scenario A 1 permit $40 Scenario B 2 permits $30 Scenario C 3 permits $20 Scenario D 4 permits $10  

Now the government is considering imposing an emission tax on polluting industry. From the first table, what is the optimal tax?

Which of the following could be a good target for NGO?

Suppose a politician has a power to regulate the monopolist in the figure below. The monopolist, currently charges Price PM, produces QM units of output and earns a profit. If consumers could persuade the politician to regulate the monopolist’s price at the competitive level PC , the result would be an output of QC . Find the area that represents the maximum amount that consumers are willing to spend on lobbying the politician.  

Lobbying is mostly likely to be successful in:

Figure 4-31 Consider the market for 2-packs of light bulbs below. ​ ​ Refer to Figure 4-31. What are the values of the equilibrium price and quantity?  At a price of $3, is there a shortage or surplus, and how large of a shortage/surplus? At a price of $6, is there a shortage or surplus, and how large of a shortage/surplus? Suppose there is an improvement in technology in this market and the price of lamps, a complementary good, increases. What changes do you predict in the equilibrium price and quantity?

Which of the following is not held constant in a supply schedule?

Suppose the United States had a short-term shortage of farmers. Which market mechanisms would adjust to remove the shortage?

Sabrina decides to spend 2 hours working overtime rather than going to the movies with her friends. She earns $15 per hour for overtime work. Her opportunity cost of working is

Table 3-8 ​ Production Possibilities Tables             Chairs 2 600 6 ? 10 200 ​ ​ Refer to Table 3-8. If the production possibilities frontier is a straight line, then how many chairs are produced when 6 tables are produced?