Approximately a thousand people enjoy a local beach. The utility each person gets from the beach is equal to x, which is equal to the number of people who contribute to cleaning up the beach. If x people are contributing to cleaning up the beach, in total they incur a cost of 2x2. If people are making decisions independently, what is the total number of people x; who would contribute to cleaning the beach? What is the socially optimal number of people x, who should contribute to cleaning the beach? (a) xi = = 0, xp = 0 (b) T; — 1, х, — 250 (с) х; — 0, хр — 250 %3D (d) х; — 0, хр — 1000

Approximately a thousand people enjoy a local beach. The utility each person gets from the beach is equal to x, which is equal to the number of people who contribute to cleaning up the beach. If x people are contributing to cleaning up the beach, in total they incur a cost of 2x2. If people are making decisions independently, what is the total number of people x; who would contribute to cleaning the beach? What is the socially optimal number of people x, who should contribute to cleaning the beach? (a) xi = = 0, xp = 0 (b) T; — 1, х, — 250 (с) х; — 0, хр — 250 %3D (d) х; — 0, хр — 1000

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter30: Market Failure: Externalities, Public Goods, And Asymmetric Information

Section30.1: Externalies

Problem 2ST

See similar textbooks

Similar questions

Suppose that it costs $300 per day to search for chanterelle mushrooms at Pt. Reyes National Seashore. On an average day, the total weight of mushrooms M found at Pt Reyes is M=100x-x2 pounds where x is the number of people mushroom hunting on that day. Chanterelles can be sold for $80 per pound. How many more people will go mushroom hunting than is socially optimal?
Suppose that it costs 500 per day to search for chanterelle mushrooms at Pt.Reyes National Seashore.On an average day, the total weight of mushrooms M found at Pt. Reyes is M = 100x - x2 pounds where x is the number of people mushroom hunting on that day. Chanterelles can be sold for $80 per pound. How many more people will go mushroom hunting than is socially optimal ?
An insurance company is looking to provide a full coverage health insurance plan to the 10 professors in the economics department at the University of Alabama. Seven of these professors are in great health and will incur no medical expenses this year. Six professors have chronic conditions which require $5000 of medical care per year for each professor. a. If the insurance company is looking to insure the entire group, what will be the actuarially fair premium it charges? b. If professors have the option to enroll in the insurance plan, what will be the profit to the insurance company if it charges the premium in part (a)? c. Name the economic phenomenon occurring in this example.
People tend to view car travel as being safer than airplane travel, but a person is how many times more likely to die from a car accident than from an airplane crash?
What is the principal question Coase posits when it comes to negative externalities? Who should be allowed to inflict harm on whom? Who is morally correct in any given argument about harm? How large is the harm caused?
Select one or more: a. A Pareto efficient outcome is where you cannot make anyone better off without someone else ending up worse off. b. All are happy with their share of income in a Pareto eﬃcient outcome. c. There is only ever one Pareto eﬃcient outcome. d. If two people have £100 to split, any split in which all the money is used up is Pareto-Efficient, even if one person gets none.
According to Kenneth Arrow, there are minimum conditions to which a social choice rule (constitution) needs to conform to in order to be ethically acceptable. Explain these conditions. Does majority decisions rule conform to Arrows conditions?
What is the number of fishing trip that will occur in the SOCIALLY OPTIMAL equilibrium?
Four individuals who live around a camp are hosting separate chirstmas parties, and all are considering purchasing aerial fireworks; any fireworks purchased will be set off over the camp, and thus will be visible to everyone at all of the parties. Karl’s marginal benefit from having an additional package of fireworks (which includes the benefit to himself and all of his guests) is given by MBK = 300 – 5Q, Jessica is given by MBJ = 600 – 10Q, Lara’s is given by MBL = 900 – 15Q, and Emily’s is given by MBE = 1,200 – 20Q, where Q is the total number of packages of fireworks set off at all parties. Each package of fireworks costs $800 (i.e., MC = 800). How many packages of fireworks will actually be set off if it is left to the free market? How much deadweight loss will result if this activity is left to the free market (as in part b)?
How would an economist answer the question: "What is the socially best amount of pollution control?" Will that likely be zero pollution?
Suppose 15 people each have the demand Q=220 - 40P for streetlights, and 10 people have the demand Q = 180 - 20P for streetlights. The cost of building each streetlight is $8. If it is impossible to purchase a fractional number of streetlights, how many streetlights are socially optimal?
Whose work on decision making received a 2002 Nobel Prize?