Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Question
Chapter 9, Problem 3P
(a)
To determine
Whether Person J should be allowed to play opera music or not.
(b)
To determine
The agreement both J and S will reach on creating noise, if there are no certain rules in the apartment about noise from music.
(c)
To determine
The agreement both J and S will reach on creating noise if there are certain rules in the apartment about people will not play music if neighbor objects.
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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.
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c) Show that if Jim and Ritesh submit their true net valuation, then Saleem does…
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?
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Chapter 9 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
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