3.Suppose 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 Q_D = 1000 - 100P and Q_S = -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

ANSWER: c

4.Suppose 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 Q_D = 1000 - 100P and Q_S = -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

ANSWER: c

5.Suppose 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 Q_D = 1000 - 100P and Q_S = -100 + 100P. The "optimal" amount of environmental damage would be

a. $0

b. $40

c. $450

d. $500

ANSWER: b

6.Suppose 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 Q_D = 1000 - 100P and Q_S = -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

ANSWER:c

NOTES: Answers are already given. Need only explanations to these answers. Thank you.