Warm-glow: now consider the case where each individual cares only about their direct marginal benefit from the public good plus an additional warm-glow marginal benefit from giving as follows: WMBA=6-NA, WMBB=6-NB, and WMBC=24-NC, where NA, NB, and NC respectively represent Alice, Bianca, and Claire’s individual contributions. For example, Alice’s total marginal benefit is TMBA=MBA+WMBA=7-N+6-NA. Remember that N=NA+NB+NC. e. Who will contribute and how many works of art will be provided?

Explain why externalities pose a problem for the utilitarian/invisible hand argument in favor of free market/laissez-faire capitalism.  Be precise and thorough and use your own words

4. Two people, A and B, are deciding whether to put effort into producing a public good or not. Each person, i, can either choose no effort (s; = 0) or yes effort (s; 1). The total public good produced is G = max{SA, SB}. The cost of doing no effort is 0. The cost of doing yes effort is 1.5. The payoff to a player is the total public goods provided (G) minus her personal costs. i. Given a choice by player B, SB, write down player A's utility from choosing no effort. Given a choice by player B, SB, write down player A?s utility from choosing yes effort.

The public smoking of cigarettes generates costs to society from second-hand smoke, therefore, cigarette production imposes costs on people who do not smoke. Moreover, private consumption of cigarettes can start apartment building and wild fires that also impose costs on non-smokers. Luckily, fire extinguishers can help prevent the spread of fires. Suppose that the government can institute either a tax on cigarette producers, or a subsidy to cigarette producers, to bring the private production costs in line with social costs. Identify where the socially optimal equilibrium would be. 0 \D" Sm S 8"

How would Veblen respond to the argument that the market directs self- interest toward societal interest?

Brian and Edison are considering contributing toward the creation of a public park. Each can choose whether to contribute $400 to the public park or to keep that $400 for a cell phone. Since a public park is a public good, both Brian and Edison will benefit from any contributions made by the other person. Specifically, every dollar that either one of them contributes will bring each of them $0.80 of benefit. For example, if both Brian and Edison choose to contribute, then a total of $800 would be contributed to the public park. So, Brian and Edison would each receive $640 of benefit from the public park, and their combined benefit would be $1,280. This is shown in the upper left cell of the first table. Since a cell phone is a private good, if Brian chooses to spend $400 on a cell phone, Brian would get $400 of benefit from the cell phone and Edison wouldn't receive any benefit from Brian's choice. If Brian still spends $400 on a cell phone and Edison chooses to contribute $400 to the…

National defense is a good that is nonexcludable and nonrival in consumption. Suppose that instead of national defense being paid for with tax dollars national defense is paid for by voluntary contributions from (potentially) all individuals within Latvia Bob, who is a Latvian citizen, must decide whether he wants to contribute to the national-defense budget. Further, suppose that there are a total of 10 citizens, including Bob. For the optimal amount of safety, each citizen should pay $10. Every $ contributed (by anyone) to the national defense leads to increased security, which each person values at $0.40. This means that every dollar spent on defense is worth $4.00 to Latvia as a whole How much does Bob personally value the increase in national defense when he contributes $10 to the defense fund? Bob's personal value: $ If contributions are voluntary, and assuming people rationally maximize their utility, what is the total contributed to national defense? total contributed…

One of the principles of economics is that people respond to incentives. Using this principle, discuss how a tax imposed on people who refuse to get vaccinated against COVID-19 virus affects the national level of vaccination coverage.