Answer the question based on the following information for a public good. Pa and Pb are the prices that individuals A and B are willing to pay for the lastunit of a public good, rather than do without it. These people are the only two members of society.QPaPb1$ 3$ 52431341Suppose government has already produced 4 units of this public good. The amount individual B is willing voluntarily to pay for the fourth unit is

Private good refers to those goods which are excludable and rival. Rival means consumption of one…

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Refer to the diagrams below in which figures (a) and (b) show demand curves reflecting the prices Alvin and Elmer are willing to pay for a public good, rather than do without it. If the marginal cost of the optimal quantity of this public good is $6, the optimal quantity must be: $12 10 Alvin (a) 4. 2. 4. $12 10 Elmer 6. 4. (b) 2.
Problem 05-01 (algo) On the basis of the three Individual demand schedules in the following table, and assuming these are the only three people in the society, determine a. the market demand schedule on the assumption that the good is a private good and b. the collective demand schedule on the assumption that the good is a public good. Instructions: Enter your answers as a whole number. Individual 1 Individual 2 Individual 3 (a) Private Demand (b) Public Demand Price Qd Price Qd Price Qd Price Qd Price Qd $8 0 $8 1 $8 0 $8 1 1 7 0 7 2 7 0 7 2 2 6 0 6 3 6 1 в 4 3 5 1 5 4 5 2 5 7 4 4 2 4 5 4 3 4 10 5 3 3 3 в 3 4 3 13 в 2 4 2 7 2 5 2 16 7 1 5 1 8 1 6 1 19 8
On the basis of the three individual demand schedules below, and assuming these three people are the only ones in the society, determine (a) the market demand schedule on the assumption that the good is a private good, and (b) the collective demand schedule on the assumption that the good is a public good. Instructions: Enter only whole numbers in the table below. Demand Curve Private Individual #1 Individual1 #2 Individual #3 Good Demand Curve - Public Good Amount Society is Willing to Рay 2$ Price ed Price Qd Price ed Price $8 1 $8 $8 1 $8 1 7 2 2 7 2 3 3 6 3 5 4. 5 4 4 2 4. 5 4. 3 6. 3 2. 7 2. 4 8 1. 1 8 1 8
What are public goods? Describe its two characteristics and give an example of a public good. Why might the government intervene in the provision of public goods. (Please answer concisely.)
5.. "Since a public good is enjoyed by all members of society, willingness to pay for the good will not diminish as the amount produced increases." Evaluate and use an example to support your answer. This statement is (correct incorrect). Public goods face (increasing, constant, diminishing ) returns like any other good. Consider the number of highways in a town, for example. Citizens of a town are very willing to pay for the first highway, as it produces large gains to the town. Successive highways produce (more and more, less and less ) willingness to pay because the citizens face lower and lower gains from the increased number of highways. In a town of, say 20,000, 15 highways (would, would not) produce much more benefit than just 2 or 3 highways because of ( increasing, constant, diminishing ) returns.
Define a public good. Give an example of a public good using your definition. Explain how to construct the market demand curve for a public good.
Explain briefly why the shape of the demand curve for the public good is downward sloping for HHA and upward sloping for HHB.
Which of the following would tend to make it challenging for governments to provide the correct amount of a public good? Governments do not have a way to get people to pay for the public good. Governments do not always know how much people value the public good O Both of these are typically challenges. O None of these are challenges for the government
The market for some public good consists of only two consumers, Elena and Talia. The marginal cost of providing this good is described by MC = 3 + 5Q. Elena's MWTP = 40 - 3Q and Talia's MWTP = 10 - 2Q. What is the socially-efficient quantity of this good? Round to the nearest whole unit
State whether each of the statements is TRUE or FALSE, and with one or more sentences and (if needed) a graph explains your reasoning as clearly as you can. a) Command-and-control approach always leads to inefficiency.b) The existence of property right will solve the externality problem associated with publicgood.c) Market failure arises from public good will be solved if consumers revealed their willingnessto pay.d) To achieve a cost-effective outcome, abatement responsibilities across polluting sourcesmust be allocated such that the level of MAC is equal across polluters.
Question 2 Suppose that three individuals each benefit from a public good. The marginal cost of the public good provision is fixed at $15 per unit: MC = $15 Whereas each of the three individuals (Person 1, Person 2, and Person 3) each receive a marginal benefit for each unit of the public good defined by: Person 1: MB!= 30 − 2Q Person 2: MB"= 20 − 2Q Person 3: MB#= 21 − Q As is the case with public goods, they are non-rival. Therefore, note that each person gains benefit from the total amount of Q purchased by everybody, not just the individual value that they purchase themselves (e.g. Q1, Q2, or Q3). 1. Draw a figure with all three MB curves, the MC curve, and the Social Marginal Benefit (SMB) Curve. Label all x-intercepts, y-intercepts, and kinks in the SMB curve Full explain this question and text typing work only

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