Question: A factory is situated next to a dormitory for nurses who work night shifts. The factory produces 120 units of humanoid robots a day. The

A factory is situated next to a dormitory for nurses who work night shifts. The factory produces 120 units of humanoid robots a day. The production process is rather noisy, and the nurses often complain that their sleep is disturbed. The following diagram depicts the marginal private cost (MPC) and marginal social cost (MSC) of the robot factory production. The robot market is competitive and the market price is $340. The government is considering implementing a tax-subsidy enforced compensation from the factory to the nurses for the costs imposed.

Based on this information and the diagram, which of the following statements is correct?

a.The nurses are better off than they would be under the Pigouvian tax.

b.The total compensation paid would be $6,400.

c.The factory's profit would be the same as under the Pigouvian tax.

d.The factory's MPC does not equal the MSC.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Sitting on Maggie Brumfield s desk is the latest planned order report ( shown below ) from the company s MRP system. Maggie s job is to determine if there is enough capacity to handle the workload...

Q2.1 A factory is situated next to a dormitory for nurses who work night shifts. The factory produces 120 units of humanoid robots a day. The production process is rather noisy, and the nurses often...

A factory is situated next to a dormitory for nurses who work night shifts. The factory produces 120 units of humanoid robots a day. The production process is very noisy, and the nurses often...

Hello, i'm right now doing economics homework and i struggle on one question A factory is situated next to a dormitory for nurses who work night shifts. The factory produces 120 units of humanoid...

1. A factory is situated next to a dormitory for nurses who work night shifts. The factory produces 120 units of humanoid robots a day. The production process is rather noisy, and the nurses often...

A factory is situated next to a dormitory for nurses who work night shifts. The factory produces 1 2 0 humanoid robots a day. The production process is rather noisy, and the nurses often complain...

A factory is situated next to a dormitory for nurses who work night shifts. The production process is rather noisy, and the nurses often complain that their sleep is disturbed. The following graph...

HBR 2020 Manual Workers Strategy loss of "good jobs" in the U.S. economy and elsewhere has inspired a slew of proposals, including mandatory labor representation on corporate boards, benefits for gig...

1. Ashley walks from her house to a bus stop that is 340 yards away. Complete the following sentence. a. As Ashley's distance from her house increases from 80 yards to 180 yards, her distance...

What are the tip reporting requirements for large food and beverage establishments?

1 . Which of the following best characterizes Altman s Z score? a . A regression model which incorporates GAAP financial statement information to estimate the value of a company s equity b . A...

Automobile repair shops typically remind customers to change their oil and oil filter every 3,000 miles. Lets call this Strategy 1 . Usually you can save money by following another legitimate...

Three mutually exclusive alternatives are being considered for the production equipment at a tissue paper factory. The estimated cash flows for each alternative are given in Table 2. (All cash flows...

Two insulation thickness alternatives have been proposed for a process steam line subject to severe weather conditions. One alternative must be selected. Estimated savings in heat loss and...

What is a construct and why is this important to measurement?

14. Think of a positive experience in your life, once you experienced that you had great creativity, great insight or a very strong concentration around some-thing you focused strongly on achieving....

How will it feel to have achieved this? Describe this briefly to yourself.

What does this look like?