1. Suppose 20 people each have the demand Q = 20 − P for streetlights and 5 people have the demand Q = 18 − 2P for streetlights. The cost of building each streetlight is $10. a. Write the social marginal benefit equation: MBS = _______ - _________ Q/2. Hint: Type integers. b. The socially optimal number of street lights is ________. Hint: Type the number in two decimal places. 2. The __________ theorem states: As long as negotiation costs are negligible and affected consumers can negotiate freely with each other, the court could allocate the entitlement to either party, and an efficient allocation would result. Hint: The answer is case sensitive.
1. Suppose 20 people each have the demand Q = 20 − P for streetlights and 5 people have the demand Q = 18 − 2P for streetlights. The cost of building each streetlight is $10. a. Write the social marginal benefit equation: MBS = _______ - _________ Q/2. Hint: Type integers. b. The socially optimal number of street lights is ________. Hint: Type the number in two decimal places. 2. The __________ theorem states: As long as negotiation costs are negligible and affected consumers can negotiate freely with each other, the court could allocate the entitlement to either party, and an efficient allocation would result. Hint: The answer is case sensitive.
Chapter17: Externalities And The Environment
Section: Chapter Questions
Problem 2.4P
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1. Suppose 20 people each have the
a. Write the social marginal benefit equation: MBS = _______ - _________ Q/2. Hint: Type integers.
b. The socially optimal number of street lights is ________. Hint: Type the number in two decimal places.
2. The __________ theorem states: As long as negotiation costs are negligible and affected consumers can negotiate freely with each other, the court could allocate the entitlement to either party, and an efficient allocation would result. Hint: The answer is case sensitive.
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