Tackle the Test: Free-Response Questions

751

  1. Question

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    Rubric for FRQ 1 (9 points)

    image

    1 point: Vertical axis labeled “Price, marginal social benefit” or “Dollars per unit,” horizontal axis labeled “Quantity of antivirus software” or “Q”

    1 point: Upward-sloping supply (or equivalently, marginal cost) curve. (Note that with no external costs, marginal private cost equals marginal social cost.)

    1 point: Downward-sloping demand (or equivalently, marginal private benefit) curve

    1 point: The market quantity of antivirus software is found at the intersection of supply and demand and shown on the horizontal axis.

    1 point: Downward-sloping marginal social benefit curve drawn above demand curve

    1 point: The optimal quantity of antivirus software is found at the intersection of supply and marginal social benefit and shown on the horizontal axis.

    1 point: The correct deadweight-loss area is shaded and labeled.

    1 point: A Pigouvian subsidy equal to the marginal external benefit at the socially optimal quantity

    1 point: A government regulation requiring the optimal quantity of antivirus software

  2. Question

    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