The three residents of Smallville are consideringa fireworks display. Clark values this public goodat $80; Lana at $50; and Pete (who dislikesfireworks) at −$30. Fireworks cost the town $120,or $40 per person. The efficient outcome is for thetowna. to provide the public good because the medianperson values it more than its cost per person.b. to provide the public good because a majorityof the residents value it more than its cost perperson.c. to provide the public good because the total valueof a majority exceeds the total cost.d. not to provide the public good because the totalvalue of all residents is less than the total cost.
The three residents of Smallville are consideringa fireworks display. Clark values this public goodat $80; Lana at $50; and Pete (who dislikesfireworks) at −$30. Fireworks cost the town $120,or $40 per person. The efficient outcome is for thetowna. to provide the public good because the medianperson values it more than its cost per person.b. to provide the public good because a majorityof the residents value it more than its cost perperson.c. to provide the public good because the total valueof a majority exceeds the total cost.d. not to provide the public good because the totalvalue of all residents is less than the total cost.
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 10PA
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Question
The three residents of Smallville are considering
a fireworks display. Clark values this public good
at $80; Lana at $50; and Pete (who dislikes
fireworks) at −$30. Fireworks cost the town $120,
or $40 per person. The efficient outcome is for the
town
a. to provide the public good because the median
person values it more than its cost per person.
b. to provide the public good because a majority
of the residents value it more than its cost per
person.
c. to provide the public good because the total value
of a majority exceeds the total cost.
d. not to provide the public good because the total
value of all residents is less than the total cost.
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