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...
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Question
Suppose there are two residents in a neighborhood, and you know both of their demand curves for a public good. What would you have to do in order to figure out what the social demand curve?
A.Multiply the two demand curves together
B.Add their demand curves together
C.Subtract the demand of the person with the lower valuation of the public good from the demand of the person with the higher valuation of the public good
D.Subtract the demand of the person with the higher valuation of the public good from the demand of the person with the lower valuation of the public good
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ISBN:
9781305156050
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning