{"id":86947,"date":"2022-08-12T04:23:57","date_gmt":"2022-08-12T04:23:57","guid":{"rendered":"https:\/\/assignmenttutors.net\/blog\/externalities-economics-homework-help\/"},"modified":"2022-08-12T04:23:57","modified_gmt":"2022-08-12T04:23:57","slug":"externalities-economics-homework-help","status":"publish","type":"post","link":"https:\/\/assignmenttutors.net\/blog\/externalities-economics-homework-help\/","title":{"rendered":"Externalities | Economics homework help"},"content":{"rendered":"
\n

Externalities<\/span><\/p>\n

\u00a0<\/p>\n

\u00a0<\/p>\n

Education is an example of a positive externality: acquiring more education benefits the individual student and having a more highly educated work force is good for the economy as a whole. <\/span><\/strong><\/p>\n

\u00a0<\/p>\n

\u00a0<\/span><\/strong><\/p>\n

\u00a0<\/p>\n

The accompanying table illustrates the marginal benefit to Sian per year of education and the marginal cost per year of education. Each year of education has a marginal external benefit to society equal to $8,000. Assume that the marginal social cost is the same as the marginal cost paid by an individual student.<\/span><\/strong><\/p>\n

\u00a0<\/p>\n

\u00a0<\/span><\/span><\/span><\/p>\n

\u00a0<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

Quantity of Education<\/span><\/span><\/p>\n

(in years)<\/span><\/span><\/p>\n<\/td>\n

\n

Sian\u2019s Marginal Benefit<\/span><\/span><\/p>\n

per year<\/span><\/span><\/p>\n<\/td>\n

\n

Sian\u2019s Marginal Cost <\/span><\/span><\/p>\n

per year<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n

\n

9<\/span><\/span><\/p>\n<\/td>\n

\n

–<\/span><\/span><\/p>\n<\/td>\n

\n

–<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n

\n

10<\/span><\/span><\/p>\n<\/td>\n

\n

$20,000<\/span><\/span><\/p>\n<\/td>\n

\n

$15,000<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n

\n

11<\/span><\/span><\/p>\n<\/td>\n

\n

19,000<\/span><\/span><\/p>\n<\/td>\n

\n

16,000<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n

\n

12<\/span><\/span><\/p>\n<\/td>\n

\n

18,000<\/span><\/span><\/p>\n<\/td>\n

\n

17,000<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n

\n

13<\/span><\/span><\/p>\n<\/td>\n

\n

17,000<\/span><\/span><\/p>\n<\/td>\n

\n

18,000<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n

\n

14<\/span><\/span><\/p>\n<\/td>\n

\n

16,000<\/span><\/span><\/p>\n<\/td>\n

\n

19,000<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n

\n

15<\/span><\/span><\/p>\n<\/td>\n

\n

15,000<\/span><\/span><\/p>\n<\/td>\n

\n

20,000<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n

\n

16<\/span><\/span><\/p>\n<\/td>\n

\n

14,000<\/span><\/span><\/p>\n<\/td>\n

\n

21,000<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n

\n

17<\/span><\/span><\/p>\n<\/td>\n

\n

13,000<\/span><\/span><\/p>\n<\/td>\n

\n

22,000<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

\u00a0<\/p>\n

\u00a0<\/span><\/span><\/span><\/p>\n

\u00a0<\/p>\n

\u00a0<\/span><\/span><\/span><\/p>\n

\u00a0<\/p>\n

    \n
  1. Find Sian\u2019s market equilibrium number of years of education <\/span><\/span><\/strong><\/li>\n<\/ol>\n

    \u00a0<\/p>\n

    \u00a0<\/span><\/p>\n

    \u00a0<\/p>\n

      \n
    1. Calculate the marginal social benefit schedule <\/span><\/span><\/strong><\/li>\n<\/ol>\n

      \u00a0<\/p>\n

      \u00a0<\/span><\/strong><\/p>\n

      \u00a0<\/p>\n

      \n\n\n\n\n\n\n\n\n\n\n\n\n
      \n

      Years of Education<\/span><\/strong><\/p>\n<\/td>\n

      		\n

      Sian\u2019s marginal benefit per year<\/span><\/strong><\/p>\n<\/td>\n

      		\n

      Marginal external benefit to society<\/span><\/strong><\/p>\n<\/td>\n

      		\n

      Marginal social benefit<\/span><\/strong><\/p>\n<\/td>\n

      		\n

      Sian\u2019s marginal cost per year<\/span><\/strong><\/p>\n<\/td>\n<\/tr>\n

      \n

      9<\/span><\/p>\n<\/td>\n

      		\n

      –<\/span><\/p>\n<\/td>\n

      		\n

      –<\/span><\/p>\n<\/td>\n

      		\n

      –<\/span><\/p>\n<\/td>\n

      		\n

      –<\/span><\/p>\n<\/td>\n<\/tr>\n

      \n

      10<\/span><\/p>\n<\/td>\n

      		\n

      $20,000<\/span><\/p>\n<\/td>\n

      		\n

      $8,000<\/span><\/p>\n<\/td>\n

      		\n

      \u00a0<\/span><\/span><\/em><\/p>\n<\/td>\n

      		\n

      $15,000<\/span><\/p>\n<\/td>\n<\/tr>\n

      \n

      11<\/span><\/p>\n<\/td>\n

      		\n

      19,000<\/span><\/p>\n<\/td>\n

      		\n

      8,000<\/span><\/p>\n<\/td>\n

      		\n

      \u00a0<\/span><\/span><\/em><\/p>\n<\/td>\n

      		\n

      16,000<\/span><\/p>\n<\/td>\n<\/tr>\n

      \n

      12<\/span><\/p>\n<\/td>\n

      		\n

      18,000<\/span><\/p>\n<\/td>\n

      		\n

      8,000<\/span><\/p>\n<\/td>\n

      		\n

      \u00a0<\/span><\/span><\/em><\/p>\n<\/td>\n

      		\n

      17,000<\/span><\/p>\n<\/td>\n<\/tr>\n

      \n

      13<\/span><\/p>\n<\/td>\n

      		\n

      17,000<\/span><\/p>\n<\/td>\n

      		\n

      8,000<\/span><\/p>\n<\/td>\n

      		\n

      \u00a0<\/span><\/span><\/em><\/p>\n<\/td>\n

      		\n

      18,000<\/span><\/p>\n<\/td>\n<\/tr>\n

      \n

      14<\/span><\/p>\n<\/td>\n

      		\n

      16,000<\/span><\/p>\n<\/td>\n

      		\n

      8,000<\/span><\/p>\n<\/td>\n

      		\n

      \u00a0<\/span><\/span><\/em><\/p>\n<\/td>\n

      		\n

      19,000<\/span><\/p>\n<\/td>\n<\/tr>\n

      \n

      15<\/span><\/p>\n<\/td>\n

      		\n

      15,000<\/span><\/p>\n<\/td>\n

      		\n

      8,000<\/span><\/p>\n<\/td>\n

      		\n

      \u00a0<\/span><\/span><\/em><\/p>\n<\/td>\n

      		\n

      20,000<\/span><\/p>\n<\/td>\n<\/tr>\n

      \n

      16<\/span><\/p>\n<\/td>\n

      		\n

      14,000<\/span><\/p>\n<\/td>\n

      		\n

      8,000<\/span><\/p>\n<\/td>\n

      		\n

      \u00a0<\/span><\/span><\/em><\/strong><\/p>\n<\/td>\n

      		\n

      21,000<\/span><\/p>\n<\/td>\n<\/tr>\n

      \n

      17<\/span><\/p>\n<\/td>\n

      		\n

      13,000<\/span><\/p>\n<\/td>\n

      		\n

      8,000<\/span><\/p>\n<\/td>\n

      		\n

      \u00a0<\/span><\/span><\/em><\/p>\n<\/td>\n

      		\n

      22,000<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

      \u00a0<\/p>\n

      \u00a0<\/span><\/strong><\/p>\n

      \u00a0<\/p>\n

      \u00a0<\/span><\/strong><\/p>\n

      \u00a0<\/p>\n

        \n
      1. \u00a0<\/span>What is the socially optimal number of years of education? <\/span><\/span><\/strong><\/li>\n<\/ol>\n

        \u00a0<\/p>\n

        \u00a0<\/span><\/strong><\/p>\n

        \u00a0<\/p>\n

          \n
        1. You are in charge of education funding. Would you use a Pigouvian tax or a Pigouvian subsidy to induce Sian to choose the socially optimal amount of education? \u00a0<\/span>Justify your answer. <\/span><\/strong><\/span><\/li>\n<\/ol>\n

          \u00a0<\/p>\n

          \u00a0<\/span><\/p>\n

          \u00a0<\/p>\n

            \n
          1. How high would you set this tax or subsidy per year of education? Justify your answer. <\/span><\/strong><\/span><\/li>\n<\/ol>\n

            \u00a0<\/p>\n

            \u00a0<\/span><\/p>\n

            \u00a0<\/p>\n

            ———————<\/span><\/strong><\/p>\n

            \u00a0<\/p>\n

            References:<\/span><\/strong><\/p>\n

            \u00a0<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

            Externalities \u00a0 \u00a0 Education is an example of a positive externality: acquiring more education benefits the individual student and having a more highly educated work force is good for the economy as a whole. \u00a0 \u00a0 \u00a0 The accompanying table illustrates the marginal benefit to Sian per year of education and the marginal cost per […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[],"class_list":["post-86947","post","type-post","status-publish","format-standard","hentry","category-education"],"_links":{"self":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/86947","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/comments?post=86947"}],"version-history":[{"count":0,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/86947\/revisions"}],"wp:attachment":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/media?parent=86947"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/categories?post=86947"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/tags?post=86947"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}