Need help with #1 and #3

a. A person w b. A person C. A person Name/I.D. Number: Chapter 17 or 30 Market Failure: Pre - Class & In-Class Activities Packet d. A college Part 4. Economic Equations and Graphs Section: e. A patient 1. Graphical questions (A - D): Date: A. Which graph below represents a negative externality ? Why? 2. Graphical questions (A - C): Why ? A. Which curve below represents a corrective tax that achieves the socially optimal output? . Which graph below represents a positive externality ? Why? B. Which curve below represents a corrective tax that moves the market output farther away from the socially optimal output than was the case before the tax was applied ? Why? MSC - MPC + MEC S - MPC External Costa 9 to a negative externality sog pue Bou E1 Representative of eternal Costs D (MPB, MSB) Quantity entity Market Output Socially polally Optimal Output Output C. Exhibit 1: Label the Graph? C. Exhibit 4: Label the Graph? 3. The objective of the government is to reduce the pollution in the area of firms X,Y, & Z Representative of Market Failure S (MPC, MSC) from 12 units to 6 units by introducing market environmentalism. The government issues two (2) pollution permits to each firm. The government tells each firm that it can emit 1 unit of pollution for each permit it has in its possession. Furthermore, the firms are allowed to buy and sell these permits. Using the following data, prove that pollution permits that can be bought Price and Cost and sold under market environmentalism can reduce pollution from 12 tons to 6 tons at lower cost than a regulation that specifies each of the 3 firms must cut its pollution in half. MSB - MPB + MEB Firm "X" Firm "y" Firm "Z" D = MPB Quantity Cost of Eliminating: Q 1 First ton of pollution $200 $500 $1,000 Market 300 700 2,000 Output Second ton of pollution Socially Optimal Third ton of pollution 400 800 2,900 Output Fourth ton of pollution 500 900 3,400 D. Exhibit 3: Label the Graph