Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Question
Chapter 11, Problem 5SPPA
To determine
To explain:
The capacity that the voters will choose if they are aware of the costs and benefits of the system and whether the bureaucrats will install the efficient capacity if voters are ignorant.
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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…
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?
Chapter 11 Solutions
Foundations of Economics (8th Edition)
Ch. 11 - Prob. 1SPPACh. 11 - Prob. 2SPPACh. 11 - Prob. 3SPPACh. 11 - Prob. 4SPPACh. 11 - Prob. 5SPPACh. 11 - Prob. 6SPPACh. 11 - Prob. 7SPPACh. 11 - Prob. 8SPPACh. 11 - Prob. 9SPPACh. 11 - Prob. 10SPPA
Ch. 11 - Prob. 1IAPACh. 11 - Prob. 2IAPACh. 11 - Prob. 3IAPACh. 11 - Prob. 4IAPACh. 11 - Prob. 5IAPACh. 11 - Prob. 6IAPACh. 11 - Prob. 7IAPACh. 11 - Prob. 8IAPACh. 11 - Prob. 9IAPACh. 11 - Prob. 1MCQCh. 11 - Prob. 2MCQCh. 11 - Prob. 3MCQCh. 11 - Prob. 4MCQCh. 11 - A renewable common resource is used sustainably if...Ch. 11 - Prob. 6MCQCh. 11 - Prob. 7MCQCh. 11 - When ITQs are assigned, the market price of an ITQ...
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