8. Best responses for individual contributions to a public good Larry and Megan each rent one unit of a two-unit apartment building. The building has two separate furnaces located between the two apartments. The renters each control and pay for the heat their furnaces generate and would choose to increase the temperature of their apartments by 30 degrees if the other never turned on their furnace, given that the marginal private benefit (MB) of the 30th degree is equal to the marginal cost (MC) of 1 degree of heat (assume that the MC of heat is constant and that the of heat is decreasing). However, each degree of heat paid for by one not only raises the temperature in that apartment by a degree but also raises the temperature in the other apartment by half a degree. As a result, if Megan were to buy 10 degrees of heat, then Larry would need to purchase only marginal benefit of the final degree was equal to the marginal cost. degrees of heat before his personal Use the blue line (circle symbol) to plot Larry's best-response function (BRF) on the following graph, with the total amount of heat he will buy on the vertical axis as a function of the total amount Megan buys (horizontal axis). (Hint: Larry's response to Megan's purchase noted previously represents one point on the line, and the response when Megan purchases 0 degrees of heat will be the vertical intercept.) Then, use the orange line (square symbol) to plot Megan's best-response function, with the total amount she will buy (horizontal axis) as a function of the total amount Larry buys (vertical axis). Finally, place the black point (plus symbol) on the graph to indicate the Nash equilibrium amount of heat each person will purchase, given the other's equilibrium choice. Note: Dashed drop lines will automatically extend to both axes.

Acres Sophia Amber Cedric 1 $12 $24 $6 2 8 18 3 10 4 3 8 3 1 6. 2 6 4 1 7 2 Consider the town of Springfield with only three residents, Sophia, Amber, and Cedric (see the Table). The three residents are trying to determine how large, in acres, they should build the public park. Suppose the cost to build the park is $12 per acre and that the residents have agreed to split the cost of building the park equally. If the residents vote to determine the size of park to builo basing their decision solely on their own willingness to pay (and trying to maximize their own surplus), what is the largest park size for which the majority of residents would vote "yes?" 1 acre 2 acres 3 acres 4 acres

INTR.27     A city is debating whether or not to build a new park. The city owns the land, having purchased it 50 years ago for $25,000. A local restaurant developer has offered $700,000 for the land. The development costs for the park would be $100,000. What is the minimum amount of the benefits for the park development in order to be rational for the city?   a $100,000 b $125,000 c $800,000 d $825,000

Suppose Walmart has announced plans to seek approval from the planning commission of a small town to build a new store. Develop alist of the main arguments, pro and con, that could be presented at a public hearing on the matter by members of each of these groups:   1. Owners of small businesses located nearby.2. Town residents, and residents of nearby towns.   How might a Walmart representative respond to the negative criticisms that might be brought up, and what other benefits could the representative offer the planning board to bolster Walmart’s case for gaining the board’s approval?