Private Good. In the table below are five individual demand schedules for ECONOBREAD, which is produced by the local government. The weekly amount of bread loaves demanded per week is provided for each price. It costs you $4 to produce each loaf of bread. There are no fixed costs. Price ($/loaf of bread per week) 7 6 9. 8 5 4 3 1 #1 Demand 2 2 #2 Demand 1 1 1 2 2 2 #3 Demand 1 2 2 2 2 3 # 4 Demand #5 Demand 1 1 1 1 2 2 3 3 3 3. 4 4 Demand Qd = 7 8 9. 10 11 12 13 14 15 Competitive Solution: P = MC, Qc = 12 Pc = 4 Total Cost of Production = 4(12) = 48 Total Taxes from each resident = TC/5 = %3D Resident Total Valuation = #1 = 3x4 = 12, #2 = #3 = #4 = #5 = %3D %3D Vote on Production (Y or N)#1 = Y, #2 = . #3 = #4 = #5 = %3D 3
Private Good. In the table below are five individual demand schedules for ECONOBREAD, which is produced by the local government. The weekly amount of bread loaves demanded per week is provided for each price. It costs you $4 to produce each loaf of bread. There are no fixed costs. Price ($/loaf of bread per week) 7 6 9. 8 5 4 3 1 #1 Demand 2 2 #2 Demand 1 1 1 2 2 2 #3 Demand 1 2 2 2 2 3 # 4 Demand #5 Demand 1 1 1 1 2 2 3 3 3 3. 4 4 Demand Qd = 7 8 9. 10 11 12 13 14 15 Competitive Solution: P = MC, Qc = 12 Pc = 4 Total Cost of Production = 4(12) = 48 Total Taxes from each resident = TC/5 = %3D Resident Total Valuation = #1 = 3x4 = 12, #2 = #3 = #4 = #5 = %3D %3D Vote on Production (Y or N)#1 = Y, #2 = . #3 = #4 = #5 = %3D 3
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
.
Transcribed Image Text:Economics 133
Exercise #6 – Government Provision of Private/Public Good Spring 2022
Private Good. In the table below are five individual demand schedules for
ECONOBREAD, which is produced by the local government. The weekly
amount of bread loaves demanded per week is provided for each price. It costs
you $4 to produce each loaf of bread. There are no fixed costs.
Price ($/loaf of bread per week)
9
8
7
6
4
2
1
#1 Demand
2
2
2
3
3
#2 Demand
1
1
2
2
#3 Demand
1
2
3
3
# 4 Demand
#5 Demand
1
1
2
2
2
3
4
4
Demand Qd =
7 8 9
10
11
12
13
14
15
Competitive Solution: P = MC, Qc = 12 Pc = 4
Total Cost of Production = 4(12) = 48 Total Taxes from each resident = TC/5 =
%3D
Resident Total Valuation =
#1 = 3x4 = 12, #2 =
»#3 =
#5 =
%D
%3D
- #4 =
Vote on Production (Y or N)#1 = Y, #2 =
#3 =
#4 =
#5 =
%3D
%3D
%3D
%3D
3,
N M 23
2)
N 223
1213
2.
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