Question 1 2.5 pts For the next five questions, consider the market for a type of medical implant used to treat pain conditions. The implant is produced by a profit-maximizing, price taking firm for which the demand and marginal cost "curves" are straight lines. It charges $380 per unit and, considering only private costs, decides to produce 920 units. Because production of the implant results in water pollution, a government agency intervenes. It determines that when 920 units are produced there are marginal social costs of $510. It therefore concludes that 740 units should instead be produced. At 740 units, marginal private cost is $305. You'll probably want to start these questions by drawing a graph of the above situation. Given this information and what we know about such firms, and carefully following numeric directions, at 920 units marginal private cost must be Note the special directions for this question: Continue working with the data regarding the pain-relieving medical implant. Enter the reduction in total spending that occurs as a result of government intervention. Although you're giving a reduction, do not include a negative sign in your answer. Carefully follow all numeric directions. Question 3 2.5 pts Note the special directions for this question: Continue working with the data regarding the pain-relieving medical implant Enter the reduction in social costs that occurs as a result of government intervention. Although you're giving a reduction, do not include a negative sign in your answer. Carefully follow all numeric directions Question 4 2.5 pts Continue working with the data regarding the pain-relieving medical implant Calculate the marginal cost of the externality for the 20th unit produced. Carefully follow all numeric directions Question 5 2.5 pts Continue working with the data regarding the pain-relieving medical implant. Is the economy better off as a result of this intervention? How do you know? Yes, because total social cost is greater than total spending, Yes, because total social cost fell more than total spending did. No, because total social cost fell more than total spending did. 09 No, because total social cost is greater than total spending, Question 1 2.5 pts For the next five questions, consider the market for a type of medical implant used to treat pain conditions. The implant is produced by a profit-maximizing, price taking firm for which the demand and marginal cost "curves" are straight lines. It charges $380 per unit and, considering only private costs, decides to produce 920 units. Because production of the implant results in water pollution, a government agency intervenes. It determines that when 920 units are produced there are marginal social costs of $510. It therefore concludes that 740 units should instead be produced. At 740 units, marginal private cost is $305. You'll probably want to start these questions by drawing a graph of the above situation. Given this information and what we know about such firms, and carefully following numeric directions, at 920 units marginal private cost must be Note the special directions for this question: Continue working with the data regarding the pain-relieving medical implant. Enter the reduction in total spending that occurs as a result of government intervention. Although you're giving a reduction, do not include a negative sign in your answer. Carefully follow all numeric directions. Question 3 2.5 pts Note the special directions for this question: Continue working with the data regarding the pain-relieving medical implant Enter the reduction in social costs that occurs as a result of government intervention. Although you're giving a reduction, do not include a negative sign in your answer. Carefully follow all numeric directions Question 4 2.5 pts Continue working with the data regarding the pain-relieving medical implant Calculate the marginal cost of the externality for the 20th unit produced. Carefully follow all numeric directions Question 5 2.5 pts Continue working with the data regarding the pain-relieving medical implant. Is the economy better off as a result of this intervention? How do you know? Yes, because total social cost is greater than total spending, Yes, because total social cost fell more than total spending did. No, because total social cost fell more than total spending did. 09 No, because total social cost is greater than total spending