Suppose residents of Toadhop live on the Quabache River, a river prone to flooding. Suppose there are 1000 (type A) people who value flood control more than the 1000 (type B) people. Type A Demand QD = 100 P Type B Demand QD = 50 P Where Q measures the quality of flood control. If the price of a unit of flood control is 100,000 and the citizens of Toadhop did not work together the amount of flood control purchased would be
a. 0
b. 10
c. 25
d. 70
QUESTION 2Suppose the market for oranges is perfectly competitive and unregulated. Suppose also that the chemicals used to keep the oranges insect-free damage the environment by an estimated 1 per bushel of oranges. Suppose QD = 1000 - 100P and QS = -100 + 100P. If regulators limited production to 200 bushels, the deadweight loss relative to the option of setting the optimal tax would be would be
a. 0
b. 200
c. 500
d. 1000
QUESTION 3Suppose the market for oranges is perfectly competitive and unregulated. Suppose also that the chemicals used to keep the oranges insect-free damage the environment by an estimated 1 per bushel of oranges. Suppose QD = 1000 - 100P and QS = -100 + 100P. The optimal amount of environmental damage would be
a. 0
b. 40
c. 450
d. 500
QUESTION 4Suppose the market for oranges is perfectly competitive and unregulated. Suppose also that the chemicals used to keep the oranges insect-free damage the environment by an estimated 1 per bushel of oranges. Suppose QD = 1000 - 100P and QS = -100 + 100P. The tax that would have to exist to achieve the socially optimal level of production would be
a. 0
b. .50
c. 1
d. 2
QUESTION 5Suppose the market for oranges is perfectly competitive and unregulated. Suppose also that the chemicals used to keep the oranges insect-free damage the environment by an estimated 1 per bushel of oranges. Suppose QD = 1000 - 100P and QS = -100 + 100P. The price consumers would have to pay for the market to achieve the socially optimal level of production is
a. 5
b. 5.5
c. 6
d. 6.5
QUESTION 6Suppose the market for oranges is perfectly competitive and unregulated. Suppose also that the chemicals used to keep the oranges insect-free damage the environment by an estimated 1 per bushel of oranges. Suppose QD = 1000 - 100P and QS = -100 + 100P. The total dollar value damage to society is
a. 400
b. 450
c. 500
d. 550
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