Econ2010-4 Assignment Example | Topics and Well Written Essays - 250 words

Econ2010-4 - Assignment Example es identifying â€Å"Social Cost†; market â€Å"equilibrium quantity consumed and price†; â€Å"external cost of antibiotic use†; â€Å"deadweight loss†; â€Å"efficient equilibrium† if one exists; and â€Å"private value†. 3. Earlier in the Economics 2010 course we learned that a tax on an ordinary good increases deadweight loss. Does the same impact result with the imposition of a tax on a good with an external cost? Explain. Yes; a tax would cause a change in the equilibrium price and quantity resulting to a inefficient market. 4. Explain the use of the â€Å"COASE THEOREM† in solving private problems of externalities. Under what conditions does the Coase Theorem breakdown as a mechanism for solving private externality issues and restoring efficient market equilibrium allocation? Explain. The theorem states that in case there is a conflict of property rights the parties involved may negotiate on terms that seem to be more beneficial to them than the assigned rights of the property. The theorem will breakdown when there are huge costs associated with bargaining. 5. Explain and/or graph with explanation the difference between controlling and regulating a negative externality by use of a â€Å"Corrective Tax†; a â€Å"Pollution permit system and market†, or a â€Å"Command and control† regulation. Explain the pros and cons of these 3 types of resolution of the negative externality problem. It is the summation of all the sales that a company makes together with other additional sources if incomes for a given period of time during the production process for a given product. It is usually given as Total revenue = price Ãâ€" quantity + other incomes Opportunity cost is the cost that somebody suffers for choosing the alternative decision over the other and it is always considered that the best choice is made between the options; the lesser privileged choice is foregone to pursue the other for more benefits to be yielded. The cost of the neglected choice is considered