Currently, 160 units of a pure public good have been provided. Alex’s demand curve for the public good is 40 −0.2q. If the price of the good is 8.5, what quantity of the public good, q, would Alex be willing to purchase?

Currently, 160 units of a pure public good have been provided. Alex’s demand curve for the public good is 40 −0.2q. If the price of the good is 8.5, what quantity of the public good, q, would Alex be willing to purchase?

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter27: Markets And Government

Section: Chapter Questions

Problem 5E

See similar textbooks

Similar questions

I need some help drawing the curve for p1+p2+p3
Bill’s demand for hamburgers (a private good) is Q = 21 − 6P and Ted’s demand is Q = 6 − 3P. Write down an equation for the social marginal benefit of the consumption of ham- burger consumption. Now suppose that hamburgers are a public good. Write down an equation for the social marginal benefit of hamburger consumption.
Scenario 4 Suppose there are two residents in a neighborhood, Tana and Jason. Tana's demand for clean streets is Q = 100 – 4P. Jason's demand for clean streets is Q = 80 – 2P. If your answer is not a whole number, please make sure to round to the nearest hundredth. Refer to Scenario 4. Find the social demand curve for clean streets in this neighborhood. What is the slope of the social demand curve? and what is the socially optimal number of clean streets if the marginal cost of cleaning them is $95?
Use the following diagram of the market for product X to answer the question below. Price Q₁ Qo Q₂ Quantity D₁ Curve S, embodies all costs (including externalities) and D, embodies all benefits (including externalities) associated with the production and consumption of X. Assuming the market equilibrium output is Q₁, we can conclude that the existence of external A) costs has resulted in an underallocation of resources to X. B) costs has resulted in an overallocation of resources to X. C) benefits has resulted in an overallocation of resources to X. D) benefits has resulted in an underallocation of resources to X.
A small town provides a fireworks display, which is a public good, every fourth of July. For simplicity, assume the town only has two residents: Hayden and Madison. Their demands for the fireworks display are illustrated in the figure to the right. Construct the market demand curve for this public good. 8.00 7.50- 7.00- 6.50- 6.00- 5.50- 5.00- 4.50- Use the line drawing tool to draw the market demand curve (DMarket) for the fireworks display. Properly label this line. 4.00- DMadison DHayden 3.50- Carefully follow the instructions above, and only draw the required objects. 3.00- 2.50- P 2.00- 1.50- 1.00- 0.50- 0.00- 2 4 6 8 10 12 14 16 Quantity (number of fireworks) Price (dollars per firework)
Scenario 4 Suppose there are two residents in a neighborhood, Tana and Jason. Tana's demand for clean streets is Q = 100 – 4P. Jason's demand for clean streets is Q = 80 – 2P. If your answer is not a whole number, please make sure to round to the nearest hundredth. Refer to Scenario 4. What is the socially optimal number of clean streets if the marginal cost of cleaning them is $35? and what is the socially optimal number of clean streets if the marginal cost of cleaning them is $5?
Suppose there are two residents in a neighborhood, and you know both of their demand curves for a public good. What would you have to do in order to figure out what the social demand curve? a-Subtract the demand of the person with the higher valuation of the public good from the demand of the person with the lower valuation of the public good b-Add their demand curves together c-Multiply the two demand curves together d-Subtract the demand of the person with the lower valuation of the public good from the demand of the person with the higher valuation of the public good
A firm has 20 employees, each of whom desires a more pleasant work environment. Accordingly, they are considering planting shrubs near the firm’s parking lot. Each employee has an inverse demand for shrubs of P = 10 − Q, where Q is the number of shrubs. The marginal cost of planting shrubs is $20 each. 1. What is the socially efficient quantity of shrubs to plant? 2. How much would each person have to pay per shrub to achieve the efficient quantity? 3. How many shrubs are likely to be planted? Why?
Fast!!!
Public Goods. Suppose a neighborhood in Segovia’s central business area is deciding how many fountains they want to see in the main avenue. There is a first group of 20 neighbors and each has a demand Q = 20 − P for fountains. There is a second group of 5 people, and each has a demand Q = 20 − 2P for fountains. The cost of building each fountain is 225. How many fountains are socially optimal? Fountains are public goods. Hint: To obtain the SMB, please first transform the demand functions into “public goods’ valuations” (“isolate P”) and then multiply them by the amount of neighbors per group. Then you can proceed with the vertical summation.
QUESTION 1 Consider the market for fast food. Suppose the demand for fast food is given by QD=6-P where P is the price of an item (a burger, say) in dollars. Also suppose the supply is given by QS=P. The equilibrium price in this market is The equilibrium quantity of fast food is Fast food produces a lot of waste in all of the packaging that goes along with it when taken to go. This waste produces negative externalities - the private cost of consuming fast food (it's price) is less than the marginal social cost, which includes the cost of having to dispose of the waste. Suppose that the additional cost to society from each item of fast food produced is 0.5 dollars. In this case, the socially efficient quantity of fast food is
Assume the Senator asks you of the optimal policy to combat CO2 emissions (carbon emissions). The senator is interested in implementing a policy that will reduce emissions from the power sector. The demand for electricity is P = 20 - 2 x Q where Q is amount of electricity demanded, and P is the price of electricity in MWh. The marginal cost of producing electricity is MC = 2 x Q And the damage caused by pollution is MEC = QWhat is the equilibrium price to consumers under competition