Alex, Kara, and Susie are the only three people in a community. Alex is willing to pay $20 for the fifth unit of a public good; Kara, $15; and Susie, $35. Government should produce the fifth unit of the public good if the marginal cost is less than or equal to Multiple Choice $15. $35. $5. $70. $20.

Alex, Kara, and Susie are the only three people in a community. Alex is willing to pay $20 for the fifth unit of a public good; Kara, $15; and Susie, $35. Government should produce the fifth unit of the public good if the marginal cost is less than or equal to Multiple Choice $15. $35. $5. $70. $20.

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter16: Public Goods And Public Choice

Section: Chapter Questions

Problem 1.1P: (Optimal Provision of Public Goods) Using at least two individual consumers, show how the market...

See similar textbooks

Similar questions

Two individual would be better off if they were able to negotiate an agreement that specifies each person’s contribution on public good. True or False. Compare this with voluntary contribution and when negotiation happen
As it relates to a public good, nonrivalry means that: the public sector is able to provide the good profitably. there is no need or demand for the good. either the public sector or the public sector can produce the good, but not both. one person's benefit from the good does not reduce the benefit available to others.
multiple choice a justification for government intervention in the economy arises from the fact that market systems usually produce _ outcomes, but the do not need necessarily produce _ outcomes. a) efficient, equitable b) Equitable, efficient c)efficient, profitable D) profitable, equitable
(Optimal Provision of Public Goods) Using at least two individual consumers, show how the market demand curve is derived from individual demand curves (a) for a private good and (b) for a public good. Once you have derived the market demand curve in each case, introduce a market supply curve and then show the optimal level of production.
Q=100-P Costs $6 to purchase a pack of cigarettes each pack smoked does $6 worth of health damage and $5 worth of secondhand health damage All consumers are aware of these costs 1. Due to an introduction of a hyper-effective tobacco fertilizer, the cost of producing a pack of cigaretts decreases to $1. How does this affect the level of smoking and the level of social loss? 2. suppose the government decides to pursue a Pigovian solution to eliminte social loss. What sort of of tax or subsidy would they implement and what is the resulting quantity of cigarette packs purchased? 3. In the case of the Coase Theorem, it is said that the socially efficient level of smokeing will occur without government intervention. how are property rights established and why might the Coase Theorem not apply in this setting?
Government action can usually perfectly correct the market’s shortcomings. true or false
Please solve the second image. First option is "to contribute" or "to not contribute" Second option is "to contribute" or "to not contribute" Third option is "the creation of a positive externality" or "why markets are efficient" or "the free-rider problem" or "the Tragedy of the Commons".
Education provides both private benefits to those who receive it and broader social benefits for the economy as a whole. Think about the types of policies a government can follow to address the issue of positive spillovers in technology and then suggest a parallel set of policies that governments could follow for addressing positive externalities in education.
If people took external benefits, such as cleaner air, into consideration when deciding how much to consume of goods that cause externalities: I. they would consume less II. they would act in a way that is optimal from a societal perspective. III. the markets for these goods would generate greater surplus. Multiple Choice II and II only I,II, and II I and II only I and III only
Suppose Fischer Pond is a common-property resource—anyone can fish without having to pay for access. Locke Lake is privately owned—people who want to fish must purchase one of a limited number of permits from the lake's owner each season. According to the incentives that private ownership creates, which of the following would you expect to happen? Check all that apply. The owner of Locke Lake is likely to keep the lake clean and unpolluted. The owner of Locke Lake is likely to limit the number of fishing permits in order to maintain a plentiful stock of fish. Fischer Pond is less likely to experience a dwindling stock of fish each season.
What is the economist’s definition of public goods? Why are public goods associated with market failure? How do the free rider problem and shirking contribute to this form of market failure
There are never unintended consequences of government intervention to address market failures. true or false