First consider a public good of value to Ann and Bob with the property that the value of the good can be expressed in monetary terms. In this case,the Samuelson condition states that the efficient level of the good is determined by MV +MVP where p is the per unit price of the good, and,for example, MV is Ann's marginal value of the good. Now consider a public good of value to Ann and Bob, the value of which CANNOT beexpressed in monetary terms. In this caseАa. We need more information before we can know how to modify the Samuelson condition.b. The Samuelson condition is of no use because we cannot compare Ann's utility to Bob's.Ⓒc. The price must be replaced with a relative price, and the marginal values must be replaced with the corresponding Marginal Rates ofSubstitution.d. The Samuleson condition continues to work as in the case where values CAN be expressed in monetary terms.

The Samuelson's condition is the requirement of providing public goods in the economy in a regular…

First consider a public good of value to Ann and Bob with the property that the value of the good can be expressed in monetary terms. In this case, the Samuelson condition states that the efficient level of the good is determined by MV +MVP where p is the per unit price of the good, and, B for example, MV is Ann's marginal value of the good. Now consider a public good of value to Ann and Bob, the value of which CANNOT be expressed in monetary terms. In this case O a. We need more information before we can know how to modify the Samuelson condition. Ob. The Samuelson condition is of no use because we cannot compare Ann's utility to Bob's. Oc. The price must be replaced with a relative price, and the marginal values must be replaced with the corresponding Marginal Rates of Substitution. Od. The Samuleson condition continues to work as in the case where values CAN be expressed in monetary terms.

First consider a public good of value to Ann and Bob with the property that the value of the good can be expressed in monetary terms. In this case, the Samuelson condition states that the efficient level of the good is determined by MV +MVP where p is the per unit price of the good, and, B for example, MV is Ann's marginal value of the good. Now consider a public good of value to Ann and Bob, the value of which CANNOT be expressed in monetary terms. In this case O a. We need more information before we can know how to modify the Samuelson condition. Ob. The Samuelson condition is of no use because we cannot compare Ann's utility to Bob's. Oc. The price must be replaced with a relative price, and the marginal values must be replaced with the corresponding Marginal Rates of Substitution. Od. The Samuleson condition continues to work as in the case where values CAN be expressed in monetary terms.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter11: Public Goods And Common Resources

Section: Chapter Questions

Problem 2PA

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