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What are negative externalities of consumption? Explain with a diagram.

An externality is any effect on a third party caused by actions and transactions that don't directly involve them. Negative externality of consumption can be defined as the cost imposed on the third party du...
DP
Answered by Dhwani P. • Economics tutor
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Why is it ineffective to tax inelastic products as a means to deter their consumption?

Define terms: An inelastic good is product for which demand does not reduce significantly as a result of an increase in price. This generally means that price increase have little impact on how much of the g...
UO
Answered by Uchechi O. • Economics tutor
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How can a government manipulate floating exchange rate?

A government can manipulate floating rate by controlling the interest rate. To increase the exchange rate, ie the value of the currency, the government can increase its interest rate, which attracts foreign ...
ML
Answered by Matthew L. • Economics tutor
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Describe a negative externality of consumption and explain a method the government can impose to reduce it. Give examples.

A negative externality of consumption is when the consumption of a good or service results in negative effects to the third party. An example of this is smoking cigarettes. The consumption of a cigarette is ...
RG
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The supply function for the production of good A is P=50+45Q. The demand function is P= 100-5Q. Find the equilibrium price and quantity.

At P Qe supply equals demand so we set equations equal to each other and solve as symoltaneous equations: 50+45Q=100-5Q then 50Q=50 so Q e =1. By plugging Q=1 into our supply function we get P Qe =95.
PK
Answered by Peter K. • Economics tutor
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