Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 18, Problem 3P
(a)
To determine
Reason for
(b)
To determine
Contribution in case the individual is altruistic.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Suppose that there is an environmental policy
that could reduce the average concentration
of a toxic substance to which 3 million people
are exposed. Suppose that as a result of the
reduction in exposure the risk of death
reduces from 1 out of 50,000 to 1 out of
60,000.
a. What is the expected number of lives that
could potentially be saved from this
environmental policy?
a. If each of the 3 million people who are
exposed is willing to pay $8 for this reduction
in risk, then what is the implied value of a
statistical life that is potentially saved as a
result of this environmental policy?
a. Your boss asks you to estimate what must be
the maximum cost of such an environmental
policy. Provide a justification for the upper
limit on the cost of such an environmental
policy.
6. You are the mayor of a town with 20,000 residents. The head
of your economic development agency recently conducted a
survey in which the 20,000 residents said that a small public
library in the center of town would be worth $40 to each of
them. The cost to build the library is $500,000. Which of the
following is the most efficient option?
a. The library should be built and paid for with donations
collected from residents, as these donations should more than
cover the cost of the library.
b. The library should be built and paid for by the wealthiest ten
percent of the residents.
c. The library should be built and paid for by the town
government and paid for with a tax on the residents because all
residents would benefit from it but some residents would not
donate if they were asked.
d. The library should not be built.
11
When performing a benefit cost analysis of different options to provide clean water to a community, the option that should be chosen is the option that maximizes the benefit to cost ratio.
True or False?
Chapter 18 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
Knowledge Booster
Similar questions
- When should a private good be produced from an efficiency standpoint? A.When the marginal cost exceeds the sum of all of society’s marginal benefit B.When the marginal cost exceeds the marginal benefit from consumption C.When the sum of all of society’s marginal benefit exceeds the marginal cost D.When the marginal benefit from consumption exceeds the marginal costarrow_forwardSome people argue that we need “more proof ” or “betterscience” before we commit to changes in our energyeconomy. How much certainty do you think we needbefore we take action regarding climate change? Howmuch certainty do you need in your own life before youmake a major decision? Should nations and elected officialsfollow a different standard? Do you feel that theprecautionary principle (pp. 155, 220) is an appropriatestandard in the case of global climate change? Why orwhy not?arrow_forwardUse this table to answer the next question. Anne and Charity are both engineers who can create roads or tunnels each year. The roads and tunnels they create are of equal, standard quality. The following table describes their maximum outputs per year. Roads Tunnels 10 2 Anne 4 Charity 8 What could Anne build with the time and other resources it takes her to build one tunnel? 1/2 road 5 tunnels 2/5 road 1/5 tunnel. 2 roadsarrow_forward
- Under which of the following scenarios would a park be considered a common resource? Select one: a. Visitors to the park must pay an admittance fee, but there are always plenty of empty picnic tables. O b. Vistors to the park must pay an admittance fee and frequently all of the picnic tables are in use. c. Visitors can enter the park free of charge and there are always plenty of empty picnic tables. d. Visitors can enter the park free of charge, but frequently all of the picnic tables are in use.arrow_forward. Both Wisconsin and Illinois border Lake Michigan. The lake is becoming polluted and both states are deciding whether or not to clean it. If Wisconsin decides to clean the lake it will cost 1200 and generate social benefits of 1500 – however, Wisconsin will receive only 1100 of those social benefits while neighbor Illinois will receive the other 400. If Illinois cleans the lake, it will cost them 700 and generate social benefits of 900 – however, Illinois will receive only 600 of those benefits, Wisconsin will receive the remaining 300. If a state does not clean the lake, it experiences a cost of $0. If both states clean the lake, the payoffs will be A. Wisconsin gains 100, Illinois gains 200B. Wisconsin gains 200, Illinois gains 300C. Wisconsin gains 200, Illinois loses 100D. Wisconsin gains 100, Illinois loses 100arrow_forward3. How do we measure the costs and benefits of public projects?arrow_forward
- What would be the net benefits to Zach and Jacob if the efficient number were provided? in deciding whether to privately. to coast. They would each benefit if lighthouses were built along the coast where they fish. The marginal cost of building each additional light- house is $100. The marginal benefit to Zach of each additional lighthouse is 90 – Q, and the marginal benefit to Jacob is 40 – Q, where Q equals the number of lighthouses. a. Explain why we might not expect to find the efficient number of lighthouses along this - coast. b. What is the efficient number of lighthouses? Jacob if the efficient number were provided? 12. A lone person fishing at a lake canarrow_forward1. what is the the importance of good governance in the public sector? 2. what are the two methods of public decision-making according to Lindbloom, give specific examples for each.arrow_forward6. Which is the best example of health care insurance in the sense of socializing risk?a. A dental insurance policy that pays for two check-ups a year but nothing else.b. A comprehensive health care policy that essentially pays for everything including check ups but is very expensivec. A health care policy that is relatively inexpensive but only pays for medical expenses after a $2,000 annual deductible is met. After $2,000 the policy pays 100 percent for everything.arrow_forward
- + 1. Milton Friedman once said: "Nobody spends somebody else's money as carefully as he spends his own. Nobody uses somebody else's resources as carefully as he uses his own. So if you want efficiency and effectiveness, if you want knowledge to be properly utilized, you have to do it through the means of private property." Explain why you tend to agree or disagree with Dr. Friedman? When should we NOT follow his idea? E E Earrow_forwardAnswer the following question:1. Are you more of a listerner or a talker? Which social skill/s do you think you need todevelop? In what ways can you develop it/them?2. If you were a parent at this time, what would you teach your children on social literacy.How would you teach them?arrow_forwardGive typing answer with explanation and conclusion Why the market tends to fail when dealing with environmental issues? It is said many externalities in environmental economics have features that are similar to that of public goods. We know that the provision of some public goods such as lighthouse can be solved through the market rather effectively. What makes environmental goods such as clean air different from other public goods such as lighthouse? Why is it more difficult to solve the provision of clear air through the market?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Macroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506756Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage LearningMicroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage LearningEconomics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
- Brief Principles of Macroeconomics (MindTap Cours...EconomicsISBN:9781337091985Author:N. Gregory MankiwPublisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Brief Principles of Macroeconomics (MindTap Cours...
Economics
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:Cengage Learning