A residential community has 100 residents who are concerned about security. The accompanying table gives the total cost of hiring a 24-hour security service as well as each individual resident's total benefit. Total individual benefit to each resident Quantity of Security Guards Total Cost $0 $0 1 150 10 300 16 3 450 18 4 600 19 a. Explain why the security service is a public good to the residents. b. Calculate the marginal cost, the individual marginal benefit for each resident, and the marginal social benefit. c. If an individual were to decide about hiring and paying for security guards on his or her own, how many guards would that person hire?

A residential community has 100 residents who are concerned about security. The accompanying table gives the total cost of hiring a 24-hour security service as well as each individual resident's total benefit. Total individual benefit to each resident Quantity of Security Guards Total Cost $0 $0 1 150 10 300 16 3 450 18 4 600 19 a. Explain why the security service is a public good to the residents. b. Calculate the marginal cost, the individual marginal benefit for each resident, and the marginal social benefit. c. If an individual were to decide about hiring and paying for security guards on his or her own, how many guards would that person hire?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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