1. Suppose 20 people each have the demand Q = 20 − P for streetlights and 5 people have the demand Q = 18 − 2P for streetlights. The cost of building each streetlight is $10. a. Write the social marginal benefit equation: MBS = _______ - _________ Q/2. Hint: Type integers. b. The socially optimal number of street lights is ________. Hint: Type the number in two decimal places. 2. The __________ theorem states: As long as negotiation costs are negligible and affected consumers can negotiate freely with each other, the court could allocate the entitlement to either party, and an efficient allocation would result. Hint: The answer is case sensitive.
1. Suppose 20 people each have the demand Q = 20 − P for streetlights and 5 people have the demand Q = 18 − 2P for streetlights. The cost of building each streetlight is $10. a. Write the social marginal benefit equation: MBS = _______ - _________ Q/2. Hint: Type integers. b. The socially optimal number of street lights is ________. Hint: Type the number in two decimal places. 2. The __________ theorem states: As long as negotiation costs are negligible and affected consumers can negotiate freely with each other, the court could allocate the entitlement to either party, and an efficient allocation would result. Hint: The answer is case sensitive.
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter17: Externalities And The Environment
Section: Chapter Questions
Problem 10PAE
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1. Suppose 20 people each have the demand Q = 20 − P for streetlights and 5 people have the demand Q = 18 − 2P for streetlights. The cost of building each streetlight is $10.
a. Write the social marginal benefit equation: MBS = _______ - _________ Q/2. Hint: Type integers.
b. The socially optimal number of street lights is ________. Hint: Type the number in two decimal places.
2. The __________ theorem states: As long as negotiation costs are negligible and affected consumers can negotiate freely with each other, the court could allocate the entitlement to either party, and an efficient allocation would result. Hint: The answer is case sensitive.
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