วีดีโอ

Sorry, I don't have that textbook. What is the topic of Chapter 4?

@@abelwinn4764 The book name is economics 19 edition. Paul a samuelson. is the author. I am stuck in impact of tax on price and quantity

@@atharvawaghaye2877 I have a playlist on taxes and subsidies. Just so you are aware it was the first or second playlist I put up on TH-cam during the pandemic, so the visual quality may not be the best. You can find it here: th-cam.com/video/5V0WE39WcFE/w-d-xo.html

Assuming that all of the units supplied (Qs) are sold on the black market for the willingness to pay that is marked on the graph (WTP), the extra profit from selling on the black market rather than at the legal price (Pbar) would be (WTP - Pbar) * Qs. This profit would be in addition to the profit you would have earned anyway by selling all Qs units at the legal price Pbar. Those legal profits can be found by subtracting the y-intercept of the supply curve (Ys) from the legal price (Pbar), multiplying by the quantity supplied (Qs) and dividing by 2. That is, the legal profit would be (Pbar - Ys) * Qs/2

Something like that. The free rider problem exists because there are significant positive externalities. So even if you don't help pay for the good you get some benefits out of its being produced.

The President of my university is from Calabria. I know what I’m talking about! 😉

(Also my wife’s family immigrated from Calabria.)

​@@abelwinn4764 Yeah, it's not like you remade a pasta recipe. I heard Italians don't like it when outsiders modify their pasta recipe, maybe they don't like it when you talk about their corruption too. But if govt in IT implements a pasta price cap, then the italian mafia or black market dealers will sell pasta in the black market. Mamma mia!!

The technology costs $5,000 no matter who pays for it. If the farmer couldn't force the railroad to install the technology, he could either pay for it himself for $5,000 or accept the $10,000 loss of not using his entire field. Paying for the technology is the cheaper option, so he would choose that.

First, I chose a trade ratio (or price) that would be suitable for both parties. For a full description of how to find such a trade ratio, you can watch my video on prices and opportunity cost (th-cam.com/video/az4xlRBce_U/w-d-xo.html). Of course, I think the whole video is worth a watch, but the most relevant content starts at 7:30. Once a suitable trade ratio is chosen, it's just a matter of deciding how many trades they will engage in. I just arbitrarily decided that they would make 4 trades. (I could have gone with 3 trades, or 5 trades, or several other numbers, but 4 trades kept the consumption points closer to the middle of graph, which I think looks nicer.) Since Alice starts with 15 fish and makes 4 trades of 1 fish for 2 blankets, she has 15 - 4 = 11 fish left, and receives 4 * 2 = 8 blankets. Bob starts with 12 blankets. He makes 4 trades, giving up 2 blankets each time in exchange for 1 fish. So he has 12 - 4 * 2 = 4 blankets left and receives 4 * 1 = 4 fish.

I think this is where the elasticity of the Demand curve and the introduction of a tradable permit comes in

I don’t give out homework answers in the comments. But take a look at the next video in the Chapter 13 playlist. It may be help you.

I think that quantity on Marginal cost curve where area under curve equals the corresponding price's total revenue, is your answer. I.e Socially optimal quantity is that quantity where monopoly producers make no profit & no loss.

@@theanmol1704 That's true if there are no fixed costs (and marginal cost is constant). But if there are fixed costs, that's no longer socially optimal, because then revenue would only cover marginal cost, not the firm's total costs. As a result, the firm would go out of business and there would be no surplus for anybody.

equations are not answers. spent the last hour trying to find how to do this with external costs and cant find any equations to help anywhere. @@abelwinn4764

Yeah, after shooting the video I realized I could have made the first example more visual/intuitive if I had gotten out my kids' Thomas the Tank Engine toys. Maybe next time!

Sorry, but I only help my own students with their assignments.

Yeah, that guy’s got a pretty great voice ;)

Glad to be of service!