Marginal Cost and Marginal BenefitQuantity (millions of megawatts) MBprivate MCprivate MCexternal MCsocial1.0 $145 $85 $ $ 2.0 130 90 3.0 115 95 4.0 100 100 5.0 85 105 6.0 60 110  Instructions: Enter your answers as a whole number. a. What is "private quantity" of electricity Texarkana Electric Company will produce each year?    million megawatts per year Now assume the production of each million megawatts of electricity also produces sulfur dioxide (a precursor to acid rain). The external cost of the sulfur dioxide is $20 per million megawatts of electricity production.  b. Fill in the external marginal cost (MCexternal) and the social marginal cost (MCsocial) columns in the table above. c. What is the socially optimal amount of electricity for Texarkana to produce if all costs and benefits are considered?      million megawatts per year

Texarkana Electric Company burns coal to heat the water that drives its electricity-producing turbines. The table below shows the marginal benefit of annual electricity consumption and the private marginal cost of annual electricity production. Marginal Cost and Marginal BenefitQuantity (millions of megawatts) MBprivate MCprivate MCexternal MCsocial1.0 $145 $85 $ $ 2.0 130 90 3.0 115 95 4.0 100 100 5.0 85 105 6.0 60 110  Instructions: Enter your answers as a whole number. a. What is "private quantity" of electricity Texarkana Electric Company will produce each year?    million megawatts per year Now assume the production of each million megawatts of electricity also produces sulfur dioxide (a precursor to acid rain). The external cost of the sulfur dioxide is $20 per million megawatts of electricity production.  b. Fill in the external marginal cost (MCexternal) and the social marginal cost (MCsocial) columns in the table above. c. What is the socially optimal amount of electricity for Texarkana to produce if all costs and benefits are considered?      million megawatts per year

By filling in the blanks in the cost schedule below, it can be determined that the total cost of the second unit of output is:QuantityTotal cost ($)Marginal cost ($)0200   1900 2 9003 3000   Question 7Select one:a.$700b.$0c.$900d.$1800e.$1000Clear my choiceQuestion 8Not yet answeredMarked out of 1.00Flag questionTipsQuestion textGross national expenditure ...... Question 8Select one:a.includes spending on imports by residents.b.includes all spending in the economy, including that on second-hand goods.c.includes transfer payments from government paid to residents abroad.d.includes spending on exports by foreigners.Clear my choiceQuestion 9Not yet answeredMarked out of 1.00Flag questionTipsQuestion textAs shown in the diagram below, the law of diminishing returns applies where there are:Question 9Select one:a.three workers per day.b.less than five workers per day.c.between two and five workers per day.d.five workers per day.e.more than five workers per day.Clear my choiceQuestion 10Not yet answeredMarked out of 1.00Flag questionTipsQuestion textEconomies of scale occur when:Question 10Select one:a.the long-run average cost curve increases as output increases.b.the long-run average cost curve remains unchanged as output increases.c.firms are producing in the long-run compared to the short-run.d.the long-run average cost curve decreases as output increase.

A coal-fired power station produces electricity worth $40 per unit to consumers. However, for each unit produced air pollution is produced, costing $20, which is not reflected in the price of electricity paid by consumers. Suppose a Pigovian tax has been implemented to correct the market distortion. In the Social CBA the production of additional electricity should be priced at:

What is the cost of the production externality per unit of production?

When a firm produces 50 000 units of output, its total cost equals $6.5 million. When it increases its production to 70 000 units of output, its total cost increases to $9.4 million. Within this range, the marginal cost of an additional unit of output is ________.