Discuss the how positive externalities cause the amount of immunization consumed in the market place to...

Discuss the how positive externalities cause the amount of immunization consumed in the market place to be below the socially efficient quantity (assuming no government regulation). Please demonstrate with a graph.

Expert Solution

Positive Externality

A positive externality exists when an individual or firm settling on a choice does not get the full advantage of the choice. The advantage to the individual or firm is not as much as the advantage to society. In this way when a positive externality exists in an unregulated market, the minimal advantage bend (the request bend) of the individual settling on the choice is not as much as the minor advantage bend to society. With positive externalities, less is delivered and devoured than the socially ideal level.

At the point when a positive externality exists in an unregulated market, shoppers pay a lower cost and expend less amount than the socially productive result. This can be seen on the chart. Customers pay value P' and devour amount Q', yet at that amount society would have them pay more. At P' Q' the negligible advantage to society is significantly higher than peripheral cost, bringing about a deadweight welfare misfortune. The socially proficient result is to pay value P* and devour amount Q*. At this cost and amount the negligible advantage to society is equivalent to the minor cost.

There are numerous Common cases of a positive externality. Vaccination keeps a person from getting an infection, yet has the positive impact of the individual not having the capacity to spread the malady to others. Keeping your yard very much kept up helps your home's estimation and furthermore helps the estimation of your neighbors' homes. Beekeepers can gather nectar from their hives, yet the honey bees will likewise fertilize encompassing fields and along these lines help agriculturists.

Taking care of the Positive Externality Problem

With a specific end goal to inspire customers to expend to a greater extent a decent that has a positive externality, an appropriation can be given to them. The appropriation will expand the minimal advantage they get when they devour the great. The endowment can be payed for by each one of the individuals who get the outer advantages.

Rahul Sunny answered 2 years ago

Externalities, be it negative or positive, cause inefficiencies in the market that eventually leads to disequilibrium....

Externalities, be it negative or positive, cause inefficiencies in the market that eventually leads to disequilibrium. Negative externalities can even be a deterrent to healthy living or peaceful living to some. There are corrective measures that address these externalities, some are government policies and some are private institutions or policies. In 150 words or more, describe one public policy and one private policy that address an externality.

Agglomeration can cause both positive and negative externalities. Suppose that the increase in population raises the...

Agglomeration can cause both positive and negative externalities. Suppose that the increase in population raises the productivity of workers since they can share their knowledge or know-how. In contrast, a higher population causes higher rent since lands become scarce. The total benefit from better productivity is given by TB = 6,000N^(1/3) whereas the total cost of higher rent is given by TC = 300N^(4/3), where N denotes the population of this city in terms of millions. Find the optimal population...

Define the term externalities. Include both positive and negative. Discuss externalities as argued by Prof Ronald...

Define the term externalities. Include both positive and negative. Discuss externalities as argued by Prof Ronald Coase in the Problem of Social cost.

Please provide and discuss two examples of positive externalities and two examples of negative externalities. Choose...

Please provide and discuss two examples of positive externalities and two examples of negative externalities. Choose any two of these four examples and discuss what the government could do to correct these market failures.

Discuss in depth how opportunity cost, cannibalization, positive externalities, and sunk costs are instrumental in capital...

Discuss in depth how opportunity cost, cannibalization, positive externalities, and sunk costs are instrumental in capital budgeting decision making.

Discuss, with EXAMPLES, why markets might fail to allocate resources efficeintly. Externalities are a major cause...

Discuss, with EXAMPLES, why markets might fail to allocate resources efficeintly. Externalities are a major cause of market failure. Using a supply and demand diagram, with an EXAMPLE, illustrate an analysis of positive externality in consumption. Explain how governments could internalise the effects of a positive externality.

Why do externalities cause market failure? What types of government actions or regulations can be used...

Why do externalities cause market failure? What types of government actions or regulations can be used to correct externalities? How do they work? What is an example of a negative externality and discuss how the government can fix it? What is an example of a positive externalities and discuss how the government addresses it? Do you agree with the way in which externalities are corrected?

Discuss two cases of externalities, one positive and one negative, that affects you directly. This could...

Discuss two cases of externalities, one positive and one negative, that affects you directly. This could be something as simple as a neighbor driving a noisy and heavy polluting truck, or the city planting new trees along a road which are pleasant to look at and also help remove carbon from the atmosphere etc. What are the economic outcomes associated with each externality, in terms of how it effects consumer and/or producer surplus? What is the socially optimal quantity relative...

2. Consider the market for fire extinguishers. a. Why might fire extinguishers exhibit positive externalities? b....

2. 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-value curve, the supply curve, and the social-cost curve. c. Indicate the market equilibrium level of output and the efficient level of output. Give an intuitive explanation for why these quantities differ. d. If the external benefit is $10 per extinguisher, describe a government policy that would yield the efficient...

One reason that a market fails is in the presence of externalities (Chapter 18) Discuss two...

One reason that a market fails is in the presence of externalities (Chapter 18) Discuss two cases of either a negative or positive externality that affects you directly. What are the economic outcomes associated with each externality (in terms of surplus/over production etc.)? What are some ways that you could intervene to correct these externalities? If your solution requires the government to be involved, discuss why. If not, also describe why! (For full credit please make a reference to Coase's...

Question