Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 3, Problem 5SPPA
To determine
Changes in
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Imagine 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.
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There are four consumers willing to pay thefollowing amounts for haircuts:Gloria: $35 Jay: $10 Claire: $40 Phil: $25There are four haircutting businesses with the following costs:Firm A: $15 Firm B: $30 Firm C: $20 Firm D: $10Each firm can give at most one haircut. To achieveefficiency, how many haircuts should be given?Which businesses should cut hair and whichconsumers should have their hair cut? How largeis the maximum possible total surplus?
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Foundations of Economics (8th Edition)
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