Exploring Macroeconomics
8th Edition
ISBN: 9781544337722
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 19P
To determine
(a)
To compute:
The expected marginal benefits of crossing and marginal costs. The change in benefit-cost equation is also to be determined.
To determine
(b)
To compute:
The expected marginal benefits of crossing and marginal costs. The change in benefit-cost equation due to the given condition is also to be determined.
To determine
(c)
To compute:
The expected marginal benefits of crossing and marginal costs. The change in benefit-cost equation due to the given condition is also to be determined.
To determine
(d)
To compute:
The expected marginal benefits of crossing and marginal costs. The change in benefit-cost equation due to the given condition is also to be determined.
To determine
(e)
To compute:
The expected marginal benefits of crossing and marginal costs. The change in benefit-cost equation due to the given condition is also to be determined.
To determine
(f)
To compute:
The expected marginal benefits of crossing and marginal costs. The change in benefit-cost equation due to the given condition is also to be determined.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
c. Imagine that you are trying to decide whether to cross a street without using the designated
crosswalk at the traffic signal. What are the expected marginal benefits of crossing? The
expected marginal costs? How would the following conditions change your benefit-cost
equation?
The street is busy.
i.
ii.
The street is empty and it was 3 a.m.
ii.
You are in a huge hurry.
iv.
A police officer is standing 100 feet away.
v.
The closest crosswalk is a mile away.
vi.
The closest crosswalk is 10 feet away.
.. Imagine that you are trying to decide whether to cross a street without using the designated crosswalk at the traffic signal. What are the expected marginal benefits of crossing? What are the expected marginal costs? How would the following conditions change your benefit cost equation?
The street was busy.
The street was empty, and it was 3:00 A.m.
you were in a huge hurry.
There was a police officer 10 metres away.
The closest crosswalk was 1 kilometre away.
The closest crosswalk was 5 metres away.
Toyota has started a major expansion of a Texas factory. It has already spent $11 million and has finished one building. It can finish the interior for an additional $6 million. The highest price it can get for the current unfinished building is $7 million. If Toyota’s estimated benefits of the building with the finished interior are $15 million, what should it do?
. a Complete the interior. The benefits of the finished building are greater than the $6 million costs of the building.
b Complete the interior. The benefits of the finished building are greater than the $7 million costs of the building.
c Complete the interior. The benefits of the finished building are greater than the $13 million costs of the building.
d Sell the building. The benefits of the finished building are less than the $17 million costs of the building. e Sell the building. The benefits of the finished building are less than the $24 million costs of the building.
Chapter 2 Solutions
Exploring Macroeconomics
Knowledge Booster
Similar questions
- What is the Benefit-Cost Analysis?arrow_forwardThe XYZ company is currently evaluating its investment. If Mr. Dela Cruz, the chief operating officer conducted a survey and found that the employees want to put up a gym to make them health conscious, what will you advice Mr. Dela Cruz? A. put up the gym regardless of their financial condition because it will make the workers happy B. put up the gym if the marginal benefit is found to be greater than the marginal cost C. do not put up the gym because it is just an added cost D. the gym should not be part of the investment decision of the firm E. putting up the gym will always be beneficialarrow_forwardUse the graph to answer these questions: a. What is the most the market will pay for 4?b. What is the least the market will accept for 8?c. What is the most the market will pay for 9?d. What is the least the market will accept for 1?e. What is the marginal benefit of the 6th unit?f. What is the marginal cost of the 2nd unit?arrow_forward
- 3. The Centers for Disease Control and Prevention (CDC) has a new vaccine against a disease and are trying to determine the optimal percentage of the population that should be vaccinated. They do not recommend vaccinating the whole population against the smallpox virus because the vaccine has undesirable, and sometimes fatal, side effects. Suppose the following table gives the data about the effects of the vaccine. a. Calculate the Marginal Benefit (in terms of how many extra lives are saved by the vaccine) and the marginal cost (in terms of how many extra lives are lost due to side effects) of each 10% increment of the vaccination. Write your answers on the appropriate columns above. b. Using marginal thinking, determine the optimal percentage of the population that should be vaccinated. Explain your answer.arrow_forwardJosh lives 1 4/5 miles from the park. So far he walked 2/3 of the distance from his house to the park. How many miles has Josh walkedarrow_forwardUse the graph to answer these questions: a. What is the least the market will accept for 1?b. What is the marginal benefit of the 6th unit?c. What is the marginal cost of the 2nd unit?arrow_forward
- Describe the Benefit-Cost Analysis?arrow_forwardEmmanuel likes gardening. He grows zucchini that he sells at the local farmers' market The costs Emmanuel faces as he decides how many hours to dedicate to his garden each week. Emmanuel's Gardening Benefits and Costs Marginal Marginal Benefit Hours Total Benefit Total Cost Cost Spent Gardening (dollars) (dollars) $9 $ (dollars) (dollars) $27 2 51 21 3 72 36 4 90 54 5 105 75 117 99 126 126 Instructions: Enter your answers as a whole number. Complete the "Marginal Benefit" and "Marginal Cost" columns in the table above.arrow_forwardImagine that a town of 200 people is trying to decide whether to pay for mosquito control. The town has surveyed their citizens and they each say they value mosquito control at $75. Mosquito control only costs $2,500 so the town goes ahead and pays for the service. When the town asks for donations to pay for the mosquito control, they only receive $1,000. What does this result show? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a The town's citizens were free riders. b The mosquito control suffered from the tragedy of commons. The mosquito control cost must have been greater than its economic benefit. d. The town's survey must have overestimated the value of mosquito control.arrow_forward
- Suppose you are part of an economic analysis team charged with recommending a policy response to pesticide risks. Explain the steps your team should take and why.arrow_forwardSuppose you are in charge of snow removal in your community and you are trying to figure out if you should clear snow on a street. You survey the 20 people that live on that street who say they they each value having snow cleared on their street at $50 per year. The snow removal only costs $600 per year so you hire a snow plow and clear the snow that winter. When you ask for donations to pay for the snow removal you only receive $80. What does this result show? a The people on that street were free-riders. b The snow removal suffered from the Tragedy of the Commons problems. c The snow removal cost must have been greater than their economic benefit. d You must have overestimated the value of a fireworks show. Please suggest me right answer with explanationarrow_forwardPlease 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…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning