To Charlie, the marginal benefit (MB) of national defense is MB = 4,500-900, where Q measures units of national defense. Sally's marginal benefit is MB = 3,000-600. The marginal cost of providing national defense is constant and equal to $2,700. Calculate the efficient quantity of national defense. Graph aggregate MB and MC to illustrate the efficient quantity of national defense (label functions and include all relevant values in the graph). Assume policymakers are able to choose the efficient level of national defense because they now each voter's marginal benefit function. If tax shares are set to force each person to may exactly what they think national defe
To Charlie, the marginal benefit (MB) of national defense is MB = 4,500-900, where Q measures units of national defense. Sally's marginal benefit is MB = 3,000-600. The marginal cost of providing national defense is constant and equal to $2,700. Calculate the efficient quantity of national defense. Graph aggregate MB and MC to illustrate the efficient quantity of national defense (label functions and include all relevant values in the graph). Assume policymakers are able to choose the efficient level of national defense because they now each voter's marginal benefit function. If tax shares are set to force each person to may exactly what they think national defe
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter11: Public Goods And Common Resources
Section: Chapter Questions
Problem 2PA
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