Wgu Gke2 Task 2

Task 1 The rice market is our product concerned in this assignment. As a pantry necessity for the Asians, the rice market has an inelastic demand. Also, it has no close substitutes or perfect substitutes. This makes the importance of rice inevitable. On the other hand, the rice market has an elastic supply. Due to the wide variety of rice provided in the market, the quantity supplied by sellers tends to respond substantially to slight changes in price. Assume an equal value of tax is placed on the consumption and production of rice market. In order to clearly present the surpluses and government revenue, a welfare analysis is shown below. As shown in the analysis, the negative difference of –B-C in consumer surplus and –D-E in producer
It is seen as a negative externality due to the use of toxic chemicals during the production of paper that are suspected of causing developmental, reproductive, and immune system damage. This reflects the society cost of producing paper is larger than cost of paper producers. As shown in the diagram, the social cost curve measures the private cost of producers and cost of bystander affected as a result of negative externality that the paper producers produced. The social cost curve shows a shift to the left of private cost curve, due to the excessive amount of paper produced, and the external cost on bystander is taken in to consideration. The difference between these two curves represent the externality(pollution) caused by the paper producer. At the quantity less than or equals to QO, consumers value paper more than the social cost of producing it. This negative production externality is considered harmful to society. If paper producer produce more thanQO, the social cost of producing paper exceeds the value of paper to consumers. Therefore the intersection point of demand curve and social cost curve indicates the social optimal quantity in the viewpoint of society. Hence reducing the plastic production below the market equilibrium, QM to the socially optimal quantity, QOincreases the total economic well-being of
Statistical evidence is presented for further understanding of how the pollutants are harmful to the society. In conclusion, the general societies will still have to bear the social cost as a result of pollutants emission due to the need of consumers.
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