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dwilliams11 dwilliams11
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4 years ago

Question 1.

The efficient output level of a public good occurs where the



▸

marginal cost of producing the last unit is equal to the marginal benefit realized by consumers.



▸

total cost of production is affordable.



▸

marginal cost of production is minimized.



▸

greatest number of free riders occurs.



Question 2.

Figure 5-16



Amit and Bree are the only two homeowners on an isolated private road. Both agree that installing street lights along the road would be beneficial and want to do so. Figure 5-16 shows their willingness to pay for different quantities of street lights, the market demand for street lights, and the marginal cost of installing the street lights.



Refer to Figure 5-16. How much is Amit willing to pay per street light to have 4 street lights installed?



▸

$3,600



▸

$2,700



▸

$1,800



▸

$900

Textbook 
InMicro

InMicro


Edition: 1st
Authors:
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DWFG2796DWFG2796
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4 years ago
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wrote...
#2
4 years ago

Figure 5-16



Amit and Bree are the only two homeowners on an isolated private road. Both agree that installing street lights along the road would be beneficial and want to do so. Figure 5-16 shows their willingness to pay for different quantities of street lights, the market demand for street lights, and the marginal cost of installing the street lights.



Refer to Figure 5-16. What is the optimal quantity of street lights to install?



▸

3



▸

4



▸

6



▸

9
wrote...
#3
4 years ago

6
wrote...
#4
4 years ago
You make an excellent tutor!
wrote...
#5
4 years ago

Figure 5-16



Amit and Bree are the only two homeowners on an isolated private road. Both agree that installing street lights along the road would be beneficial and want to do so. Figure 5-16 shows their willingness to pay for different quantities of street lights, the market demand for street lights, and the marginal cost of installing the street lights.



Refer to Figure 5-16. Suppose Amit and Bree know each other's preferences so that it is not possible for one to deceive the other. Which of the following statements best describes the circumstances under which the optimal quantity of street lights could be achieved?



▸

The optimal quantity will be installed only if the two parties agree to pay according to their willingness to pay as indicated by their respective demand curves.



▸

Because there are only two consumers, it is likely that private bargaining will result in the optimal quantity being installed.



▸

The optimal quantity will be installed only if Bree pays for the entire installation cost.



▸

The optimal quantity will be installed only if the two parties split the cost of installation equally.
wrote...
#6
4 years ago

Because there are only two consumers, it is likely that private bargaining will result in the optimal quantity being installed.
wrote...
#7
4 years ago
thank you!
wrote...
#8
3 years ago
thank you
wrote...
#9
3 years ago
thank you
wrote...
#10
3 years ago
Thank you
wrote...
#11
3 years ago
Thanks
wrote...
#12
3 years ago
thanks
wrote...
#13
3 years ago
thank you
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