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7. Two towns, each with three residents, are deciding whether to put on a fireworks display to celebrate the New Year. Fireworks cost $360. In each town, some people enjoy fireworks more than others. a. In the town of Bayport, each of the residents values the public good as follows: Frank $50

7. Two towns, each with three residents, are deciding whether to put on a fireworks display to celebrate the New Year. Fireworks cost $360. In each town, some people enjoy fireworks more than others. a. In the town of Bayport, each of the residents values the public good as follows: Frank $50

Principles of Microeconomics (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter11: Public Goods And Common Resources
Section: Chapter Questions
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7. Two towns, each with three residents, are deciding whether to put on a fireworks display to celebrate the New Year. Fireworks cost $360. In each town, some people enjoy fireworks more than others. a. In the town of Bayport, each of the residents values the public good as follows: Frank $50 Joe $100 Callie $300 Would fireworks pass a cost-benefit analysis? Explain. b. The mayor of Bayport proposes to decide by majority rule and, if the fireworks referendum residents. Who would vote in favor, and who would vote against? Would the vote yield the same answer as the cost-benefit analysis? c. In the town of River Heights, each of the residents values the public good as follows: Nancy $20 Bess $140 Ned $160 Would fireworks pass a cost-benefit analysis? Explain.
Transcribed Image Text:7. Two towns, each with three residents, are deciding whether to put on a fireworks display to celebrate the New Year. Fireworks cost $360. In each town, some people enjoy fireworks more than others. a. In the town of Bayport, each of the residents values the public good as follows: Frank $50 Joe $100 Callie $300 Would fireworks pass a cost-benefit analysis? Explain. b. The mayor of Bayport proposes to decide by majority rule and, if the fireworks referendum residents. Who would vote in favor, and who would vote against? Would the vote yield the same answer as the cost-benefit analysis? c. In the town of River Heights, each of the residents values the public good as follows: Nancy $20 Bess $140 Ned $160 Would fireworks pass a cost-benefit analysis? Explain.
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