Question

In: Economics

Graphing Assignment # 4 The city of Crawfordville, Florida has a very bad problem with the...

Graphing Assignment # 4 The city of Crawfordville, Florida has a very bad problem with the mosquito population from late April through late September almost every year. The City generally sprays the mosquito population to deal with the problem. The data below, collected and maintained by the City of Crawfordville’s Finance Department, shows the City’s market data for spraying for mosquitoes. The price is measured in thousands of US dollars per spraying and both quantities are measured in dozens of spraying events events per year, from 2003-2016. P 85 75 65 55 45 35 25 Qs 14 12 10 8 6 4 2 Qd 2 4 6 8 10 12 14 The Rafferty Analytic Group, LTD., Port St Lucie, Florida, is a firm that specializes in chemical spraying l data collection. The firm at the request of the City Council has studied the Crawfordville population and discovered the City generates an externality of $15 for each and every spraying for mosquitoes. This is due to the mist that is created by the spraying which is a general irritant to the nose, eyes and lungs of the residents, the fact that people need to wash their cars after the spraying (unless they keep them in a garage), and are not allowed outdoors for 6 hours in the area once sprayed. a. In one clearly and accurately labeled graph, created using Excel, graph the market data as collected by the City Council as well as the market failure that the Rafferty Group has discovered. This will be graph # 7. (45 pts) b. Referencing only your graph, what equilibrium price and quantity did the market generate? (3 pts) c. Referencing only your graph, what is the extent of market failure in this situation? What price and quantity are consistent with an efficient level of spraying? (6 pts) d. Given that there is market failure, provide one solution for how the efficient level of mosquito spraying can be achieved. (

if possible can it be answered using exel

This is all the sheet says this is what we were given

Solutions

Expert Solution

Answer:-

The below diagram shows the downward sloping private marginal benefit curve (PMB) and private marginal cost (PMC) curve out of the data collected by City COuncil (given data table). Due to $15,000 of negative externality, the social marginal cost curve lies left to the PMC as shown in the digram. Hence, the extent of market failure (or the amount of welfare loss is shown as the area of the shared triangle EFT.

(b) The market attains equilibrium at point E, i.e., at the intersection of the PMB and PMC. In other words, the equilibrium quantity = 8 dozens and equilibrium price = $55,000 as observed from the diagram.

(c) Socially optimal level of price and quantity are respectively $62,500 and 6.5 dozens. That is the price of $62,500 and quantity of 6.5 dozens are consistent with an efficient level of spraying.

Hence, the extent of market failure = area of the shaded triangle = 0.5 * ET * (difference betwwen market and socially optimal output)

= 0.5 * 15,000 * (8-6.5) where 15,000 is the extent of externalities, 8 = market equilibrium output and 6.5 = socially optimum output.

=> Loss of social welfare (or extent of market failure) = 0.5(15,000)(1.5) = $11,250

(d) One way is to impose a tax of amount $15,000 on producion so that the PMC shifts to coincide with SMC. This will result in an socially optimum level of output i.,e., 6.5


Related Solutions

The city of Crawfordville, Florida has a very bad problem with the mosquito population from late...
The city of Crawfordville, Florida has a very bad problem with the mosquito population from late April through late September almost every year. The City generally sprays the mosquito population to deal with the problem. The data below, collected and maintained by the City of Crawfordville’s Finance Department, shows the City’s market data for spraying for mosquitoes. The price is measured in thousands of US dollars per spraying and both quantities are measured in dozens of spraying events events per...
The city of Crawfordville, Florida has a very bad problem with the mosquito population from late...
The city of Crawfordville, Florida has a very bad problem with the mosquito population from late April through late September almost every year. The City generally sprays the mosquito population to deal with the problem. The data below, collected and maintained by the City of Crawfordville’s Finance Department, shows the City’s market data for spraying for mosquitoes. The price is measured in thousands of US dollars per spraying and both quantities are measured in dozens of spraying events events per...
This assignment is the same for both Florida & non Florida students. This problem requires the...
This assignment is the same for both Florida & non Florida students. This problem requires the student to develop a simple budget. At the end of the course, the student will receive a STAR for completing this assignment. This assignment must be completed in either MS Excel or in with a MS Word table* Budget Case Problem Meadow Lake Elementary will receive 600 additional students next fiscal year. This increase in student enrollment will raise the school over the number...
Anais is 84 and has very bad arthritis in her hands and sores on her legs....
Anais is 84 and has very bad arthritis in her hands and sores on her legs. She cannot get around so much by herself. Once a day she is visited by home nurse who treats her sores and gives her a weekly vitamin injection. Anais has recently had an operation on her hands, which required her to spend a week in hospital. The occupational therapist gave Anais a long-handled hairbrush, tooth brush and knife and fork to help her with...
The city of Delhi has some of the very worst air pollution in the world. One...
The city of Delhi has some of the very worst air pollution in the world. One key source of that air pollution are motor vehicles. The city is contemplating ways to reduce air pollution from motor vehicles. Suppose they know that the marginal benefits of abatement are equal to MB(a) = 154 -10a, which comes entirely from health benefits to the local population. There is no uncertainty about the benefits of abatement. But, the Delhi government is uncertain about costs....
The City of Wolfe has issued its financial statements for Year 4 (assume that the city...
The City of Wolfe has issued its financial statements for Year 4 (assume that the city uses a calendar year). The city’s general fund is made up of two functions: (1) education and (2) parks. The city also utilizes capital projects funds for ongoing construction and an enterprise fund to account for an art museum. It also has one discretely presented component unit. The government-wide financial statements indicated the following Year 4 totals: Education had net expenses of $618,000. Parks...
Please write it clears and neat and follow the question. Assignment: The city of Cambridge has...
Please write it clears and neat and follow the question. Assignment: The city of Cambridge has mandated that employers “shall adopt, implement, and maintain a written smoking policy which shall contain a prohibition against smoking in restrooms and infirmaries.” Employers must also “maintain a nonsmoking area of not less than one-third of the seating capacity in cafeterias, lunchrooms, and employee lounges, and make efforts to work out disputes between smokers and nonsmokers.” Your Task: As Lindsay English, director of Human...
1. The taxi industry in the city has become very competitive. Entry and exit are currently...
1. The taxi industry in the city has become very competitive. Entry and exit are currently easy. Anyone can enter the market without a license or certificate and use their own cars. The major taxi company has complained that it is hard to make any profits and wants the city to institute a program that requires taxi drivers to purchase a medallion per car before it can operate. Moreover, the taxi company has incurred significant costs to build its fleet...
The quadratic equation, 2x^2 - 7x - 4 = 0  can be solved by: Graphing with or...
The quadratic equation, 2x^2 - 7x - 4 = 0  can be solved by: Graphing with or without technology. Factoring Using the quadratic formula. Solve the quadratic equation using all three techniques. Rank the techniques in the order in which you would use them to solve this problem. Explain why you chose that particular ranking and summarize the benefits of each method. Explanations, diagrams, examples, formulas and mathematical terminology should all be included in your solution. Be thorough!
State tax allocation problem Beach Hut is based in Georgia and has stores in Florida. Georgia...
State tax allocation problem Beach Hut is based in Georgia and has stores in Florida. Georgia has a 3.8% corporate tax rate, Florida is 17%. Because it is a seasonal operation, Beach Hut sells all merchandise at end of season for 40% of manufacturer’s list price to a discount jobber. There are no opening or closing inventories. All merchandise is ordered by the Georgia office. Financial reports show the following activity for 2017. Purchases 14,000,000 Sales 21,000,000 (16,000,000in Georgia, 5,000,000...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT