Principles of Microeconomics, California Edition
2nd Edition
ISBN: 9780393622102
Author: Dirk Mateer, Lee Coppock
Publisher: NORTON
expand_more
expand_more
format_list_bulleted
Question
Chapter 7, Problem 4QR
To determine
Explain the cost–benefit analysis
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
What is cost–benefit analysis of public goods?Why is it important? Why is it hard?
One hundred of the voters in a town are willing to pay $100 each to support a public green space, which will cost $10,000 to build and maintain. One hundred and fifty voters in the same town do not value the public green space. What is the socially optimal outcome?
Answer the question
1. Identify an external benefit that could be generated by the presence of a shopping mall for a local residents.
Chapter 7 Solutions
Principles of Microeconomics, California Edition
Knowledge Booster
Similar questions
- What is One of the most important aspects of any public project to quantify the benefits in dollars? Give an example?arrow_forwardHow can the benefit-cost analyses attempt to determine whether thesocial benefits of a proposed public activity outweigh the social costs?arrow_forwardIdentify an external benefit that could be generated by the presence of a shopping mall for local residents.arrow_forward
- I don’t know what the correct answers to this. I’ve asked a couple times and it still wrong. The only options left are 1) cost benefit analysis is likely to lead to implementation policies that promote private provision of goods and services or 2) some item of value doesn’t have an owner with legal authority to control it.arrow_forwardPlants A and B emit 12 tons and 6 tons of carbon dioxide (CO2), respectively. MAC(marginal abatement costs) for a = 12 - Ea, MACb=12-2Eb MD(marginal damage) = 1/3*E (E indicates CO2 emission) What is the social optimum for power plants A and B to reduce CO2 by some amount, and how much reduction cost each power plant bears?arrow_forwardWhat 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 failurearrow_forward
- What are the two characteristics of public goods? Explain the significance 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.arrow_forwardWhat is a public good? What are its two defining characteristics? Provide an example.arrow_forwardExplain using the real life examples. Public goods are free of cost.arrow_forward
- Please solve part d,e and f!!! Three roommates, Jim, Saleem, and Ritesh, are thinking about buying a new speaker system for their apartment. The speaker system would be a public good if they buy them, and the total cost would be $300 which would be shared equally among the three. Jim values it at $80, Saleem values it at $140, and Ritesh values it at $70. If the speakers are purchased each person gets a payoff equal to their net valuation (valuation minus cost share); if they are not purchased each gets zero payoff. a)Is it socially efficient that they buy the speaker system? With reference to the definition of a public good, why or why not? The roommates decide that they will write down their net valuations, and if these reports sum to more than zero, they will buy the TV (sharing the cost equally), or else they will not. b) If all were to report their true valuations, what payoff would each agent earn? c) Show that if Jim and Ritesh submit their true net valuation, then Saleem does…arrow_forwardIndividuals go for flu injection not only protect themselves against flu but also help to prevent the disease from spreading in the community. (a) What type of externality occurs in the flu injection market? (b) Is the market outcome efficient? (c) What can the government do to rectify the externality issue?arrow_forwardExternalities Do you think that there would be external effects associated with Water from a uranium mine leaking into Kakadu National Park? If so, what would be the nature of the external effects? Can you think of policies that might deal with each external effect (that is, improve social wellbeing)?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning