9.

Consider again the chewing gum market in Anteaterville. Suppose the cumulative external cost associated with chewing gum (due to the issues described in the previous question) amounts to $0.50 per pack (i.e., the marginal damage is $0.50). Assuming for now that there are no other market failures in the chewing gum market, then taking into account the externality, the socially optimal quantity of packs of chewing gum is . (Please enter only a number in the blank, and round to the nearest whole number if necessary.) Consider again the market for chewing gum in Anteaterville. To address the externality and ensure that the private market for chewing gum delivers the socially efficient outcome, the government would need to impose a v [ Select ] of [ Select ] subsidy taxConsider again the market for chewing gum in Anteaterville. To address the externality and ensure that the private market for chewing gum delivers the socially efficient outcome, the government would need to impose a [ Select ] O v [ Select ] $0 per pack $0.05 per pack $0.25 per pack $0.50 per pack $0.75 per pack $0.95 per pack $1 per pack Question 12 $1.05 per pack 2 pts $1.25 per pack $1.50 per packBased on the theory developed by Tiebout, which factor determines whether a good or service should be provided by local governments as opposed to higher levels of government? 0 The extent of any externalities associated with that good or service across local communities. 0 The strength of the tax-benet linkage associated with that good or service. 0 The extent of any economies of scale in the provision of that good or service. All of the above. Peter has $5,000 to put toward consumption this month. He believes there is a 5% chance he will get into a car accident this month, in which case he expects to incur costs of $1,000. Assuming Peter is risk averse, 0 he will be willing to pay $50 for $1,000 worth of insurance coverage. 0 he will only buy partial insurance (or possibly no insurance) if it is priced at a rate that is above the actuarially fair rate. 0 he would not purchase more than $1,000 worth of insurance if it is priced at an actuarially fair rate. 0 All of the above. 0 None of the above. Some Anteaterville residents have a habit of throwing their chewing gum on the sidewalk when they are finished chewing it. The discarded chewing gum is an eyesore, sticks to people's shoes, and has to be cleaned off by city workers periodically. These costs represent negative [ Select ] production externalities associated with chewing gum. consumption