How are the characteristics of public goods similar to/different from common pool resources? Public goods and common pool resource goods are alike in that both are ( Select ] goods. But public goods differ from common pool resource in that public goods are ( Select ] goods, while common [ Select 1 peel roceurce geodc are goodr nde

How are the characteristics of public goods similar to/different from common pool resources? Public goods and common pool resource goods are alike in that both are ( Select ] goods. But public goods differ from common pool resource in that public goods are ( Select ] goods, while common [ Select 1 peel roceurce geodc are goodr nde

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter11: Public Goods And Common Resources

Section: Chapter Questions

Problem 2CQQ

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Suppose the demand for standard sized bottled water in the US is Qd=120-30.5P where Qd is monthly quantity demanded in millions and P is the price per bottle in dollars and cents. If the marginal private cost (MPC) of producing the bottled water is one dollar, calculate the market equilibrium quantity. Explain what a constant marginal cost implies. Does that mean the total opportunity cost of producing bottled water is unrelated to how many are produced? Let’s assume that the marginal private benefit (MPB) of bottled water equals the marginal social benefit (MSB). Explain what that means. At the equilibrium calculated in part A, what do you know about buyers’ willingness to pay in each transaction?
Consider an economy with n consumers, one privategood and one public good. We think of the private good as “all othergoods,” and measure it in terms of money. There are n individuals inthe economy with utility functions Ui(xi, y) = αi ln y + xi, where y is thepublic good, xi is the private good consumed by individual i = 1, . . . , n,and 0 < α1 < α2 < · · · < αn are parameters. Initial endowment of privategood of each consumer is given by wi. We donote the aggregate endowment 1of the private good by w =Pi wi. The cost of producing the public good is c(y) = cy for some c > 0. Find the optimal provision of the public good as well as how much is provided under voluntary contributions.
Explain why that among private goods, public goods, common goods and club goods, only private goods constitute an efficient allocation of resources. Essay
What are the two characteristics of public goods? Explain the signifificance of each for public provision as opposed to private provision. What is the free-rider problem as it relates to public goods? Is U.S. border patrol a public good or a private good? Why? How about satellite TV? Explain.
1a) Water filtration removes contaminants that increase the risk of plant diseases from a farmer's water sources. As a result, there is a decreased risk of consumers suffering illnesses from consuming crops grown with filtered water. Due to this, economists might suggest that the use of water filtration systems in agriculture has an associated ________ externality? 1b) Draw the private cost, private benefit, social cost, and social benefit curves in the market for water filtration systems. If any of the curves are the same, label the curve as both. 1c) Is there market failure if the market runs freely? If so, is the socially optimal quantity of farmers using water filtration systems higher or lower than the market outcome? 1d) Provide a policy suggestion that would help to correct any market failures that arise due to this externality. Explain why this would be effective. 2a) Livestock and poultry farming are some of the largest contributors of ammonia emissions. Ammonia has been…
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High-income people are willing to pay more thanlower-income people to avoid the risk of death.For example, they are more likely to pay for safetyfeatures on cars. Do you think cost–benefit analystsshould take this fact into account when evaluatingpublic projects? Consider, for instance, a rich townand a poor town, both of which are considering theinstallation of a traffic light. Should the rich town usea higher dollar value for a human life in making thisdecision? Why or why not?
There three individuals each benefit from a public good. The marginal cost of the public good provision is fixed at $20 per unit: MC = $20Whereas each of the three individuals each receive a marginal benefit for each unit of the public good defined by: Person 1: MB1= 40 − 2Q Person 2: MB2= 30 − 2Q Person 3: MB3= 31 − Q They are non-rival, just like with public goods. Therefore, each person benefits from the overall quantity of Q purchased by everyone, not only from the value that they personally acquire.1. Draw a figure with all three MB curves, the MC curve, and the Social Marginal Benefit (SMB) Curve. Label all x-intercepts, y-intercepts, and kinks in the SMB curve.2. Given the above MB curves, write down the Social Marginal Benefit Curve as a function of Q. 3. What is the Socially Optimal Choice of Q and would any private individual purchase this on their own?
Public goods are often thought to be goods or services that are provided by the government, but that is confusing cause and effect. What are the characteristics of a public good? Hint: Who provides the public good is not one of the characteristics.