Suppose certain fireworks are legal in a residential area on the Fourth of July. The fireworks have been approved for safety, but theydo cause noise pollution so their use must be limited. Jenny and Salo like to purchase fireworks for their families; the table belowshows each individual's willingness to pay for fireworks. The price of fireworks is $2 per firework.Willingness topay1099876543210Jenny0102030405060708090100Qsalo05101520253035404550Instructions: Enter your answers as whole numbers.a. If a quota of 30 fireworks per person is imposed, Jenny is willing to pay $Salo is willing to pay $for his last firework.b. If the government wants no more than 60 total fireworks to be purchased, a tax of $[supply curve is perfectly elastic such that the full burden of the tax will fall on consumers.)fireworks and Salo will purchaseUnder this tax, Jenny will purchasefor her last firework.should be imposed. (Note that thefireworks.

Willingness to pay (WTP) refers to the max amount of cash that a person is willing and able to spend…

Suppose certain fireworks are legal in a residential area on the Fourth of July. The fireworks have been approved for safety, but they do cause noise pollution so their use must be limited. Jenny and Salo like to purchase fireworks for their families; the table below shows each individual's willingness to pay for fireworks. The price of fireworks is $2 per firework.

Suppose certain fireworks are legal in a residential area on the Fourth of July. The fireworks have been approved for safety, but they do cause noise pollution so their use must be limited. Jenny and Salo like to purchase fireworks for their families; the table below shows each individual's willingness to pay for fireworks. The price of fireworks is $2 per firework.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Frontiers Of Microeconomics

Section: Chapter Questions

Problem 6PA

See similar textbooks

Similar questions

Assume that you are in the business of building houses in United Kingdom. You have analyzedthe market carefully, and you know that at a price of £120,000, you will sell 800 houses peryear. In addition, you know that at any price above £120,000, no one will buy your housesbecause the government provides equal-quality houses to anyone who wants one at £120,000.You also know that for every £20,000 you lower your price, you will be able to sell an additional200 units. For example, at a price of £100,000, you can sell 1,000 houses; at a price of £80,000,you can sell 1,200 houses; and so on.a. Sketch the demand curve that your firm faces.b. Sketch the effective marginal revenue curve that your firm faces.c. If the marginal cost of building a house is £100,000, how many will you build and whatprice will you charge? What if MC = £85,000?
7 This figure below shows the payoffs involved when Sarah and Joe work on a school project together for a single grade. They both will enjoy a higher grade when more effort is put into the project, but they also get pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive. 1 Sarah points Lew Effont High Effert 00:40 25 Low Effort Joe High Effon The outcome of the game in the figure shown will be: Multiple Choice Joe puts forth high effort and Sarah puts forth low effort. Joe puts forth low effort and Sarah puts forth high effort. Joe and Sarah both put forth low effort. Joe and Sarah both put forth high effort.
Suppose that there are three beachfront parcels of land available for sale in Astoria and six people who would each like to purchase one parcel. Assume that the parcels are essentially identical and that the minimum selling price of each is $570,000. The following table states each person's willingness and ability to purchase a parcel. Person Willingness and Ability to Purchase (Dollars) Ana 630,000 Charles 590,000 Dina 550,000 Gilberto 510,000 Juanita 500,000 Yakov 700,000 Which of these people will buy one of the three beachfront parcels? Check all that apply. Ana Charles Dina Gilberto Juanita Yakov Assume that the three beachfront parcels are sold to the people that you indicated in the previous section. Suppose that a few days after the last of those beachfront parcels is sold, another essentially identical beachfront parcel becomes available for sale at a minimum price of $560,000. This fourth parcel ____ (will,…
Suppose that there are three beachfront parcels of land available for sale in Asilomar and six people who would each like to purchase one parcel. Assume that the parcels are essentially identical and that the minimum selling price of each is $400,000. The following table states each person's willingness and ability to purchase a parcel. Willingness and Ability to Purchase Person (Dollars) Bob 420,000 Cho 380,000 Eric 340,000 Ginny 330,000 Sean 550,000 Yvette 480,000 Which of these people will buy one of the three beachfront parcels? Check all that apply. Bob Cho Eric Ginny Sean O Yvette Assume that the three beachfront parcels are sold to the people that you indicated in the previous section. Suppose that a few days after the last of those beachfront parcels is sold, another essentially identical beachfront parcel becomes available for sale at a minimum price of $360,000. This fourth be sold, because will purchase it from the seller for at least the minimum price. parcel
4
It is the morning commute in Congestington, DC. Of 100 drivers, eachdriver is deciding whether to take the toll road or take the back roads. Thetoll for the toll road is $10, while the back roads are free. In deciding ona route, each driver cares only about income, denoted y, and his traveltime, denoted t. If a driver’s final income is y and his travel time is t, thenhis payoff is assumed to be y - t (where we have made the dollar value ofone unit of travel time equal to 1). A driver’s income at the start of the dayis $1,000. If m drivers are on the toll road, the travel time for a driver onthe toll road is assumed to be m (in dollars). In contrast, if m drivers takethe back roads, the travel time for those on the back roads is 2m (again,in dollars). Drivers make simultaneous decisions as to whether to take thetoll road or the back roads.a. Derive each player’s payoff function (i.e., the expression that gives usa player’s payoff as a function of her strategy profile.)b. Find a Nash…
Jill and Jack both have two pails that can be used to carry water down from a hill. Each makes only one trip down the hill, and each pail of water can be sold for $4. Carrying the pails of water down requires considerable effort. Both Jill and Jack would be willing to pay $2 each to avoid carrying one pail down the hill, and an additional $3 to avoid carrying a second pail down the hill.a. If Jack and Jill each must decide whether to carry one or two pails of water down from the top of the hill, how many pails will each child choose to carry? ___ pail(s)b. Jill and Jack’s parents are worried that the two children don’t cooperate enough with one another. Suppose they make Jill and Jack share equally their revenues from selling the water. Given that both are self-interested, construct the payoff matrix for the decisions Jill and Jack face regarding the number of pails of water each should carry. Carry 1 pail Jack Carry 2 pails…
Jill and Jack both have two pails that can be used to carry water down from a hill. Each makes only one trip down the hill, and each pail of water can be sold for $5. Carrying the pails of water down requires considerable effort. Both Jill and Jack would be willing to pay $4 each to avoid carrying one pail down the hill, and an additional $4 to avoid carrying a second pail down the hill. a. If Jack and Jill each must decide whether to carry one or two pails of water down from the top of the hill, how many pails will each child choose to carry? 2 pail(s) b. Jill and Jack's parents are worried that the two children don't cooperate enough with one another. Suppose they make Jill and Jack share equally their revenues from selling the water. Given that both are self-interested, construct the payoff matrix for the decisions Jill and Jack face regarding the number of pails of water each should carry. Instructions: In the payoff matrix below, enter the payoffs for each child for each possible…
Consider a small town with only three families, the Greene family, the Brown family, and the Black family. The town does not currently have any streetlights so it is very dark at night. The three families are considering putting in streetlights on Main Street and are trying to determine how many lights to install. The table below shows each family’s willingness to pay for each streetlight. Number ofStreetlights The Greene Family The Brown Family The Black Family 1 $340 $480 $420 2 260 380 400 3 160 260 340 4 40 130 240 5 0 50 100 6 0 0 20 Refer to Table 11-2. Suppose the cost to install each streetlight is $360 and the families have agreed to split the cost of installing the streetlights equally. If the residents choose to install the number of streetlights that will maximize total surplus from the streetlights, how much total surplus will the Greene family receive? a. -$80 b. $360 c. $320…
Five roommates are planning to spend the weekendin their apartment watching movies, and they aredebating how many movies to watch. The tablebelow shows each roommate’s willingness to pay foreach of the movies:Ava Ridley Spike Kathryn QuentinFirst film $14 $10 $8 $4 $2Second film 12 8 4 2 0Third film 10 6 2 0 0Fourth film 6 2 0 0 0Fifth film 2 0 0 0 0A movie on their streaming service costs $15, which theroommates split equally, so each pays $3 per movie.a. What is the efficient number of movies to watch(that is, the number that maximizes total surplus)?b. For each roommate, what is the preferred numberof movies to watch?
Four roommates are planning to spend the weekendin their dorm room watching old movies, and they are debating how many to watch. Here is their willingness to pay for each film: a. Within the dorm room, is the showing of a movie apublic good? Why or why not?b. If it costs $8 to rent a movie, how many moviesshould the roommates rent to maximize totalsurplus?c. If they choose the optimal number from part(b) and then split the cost of renting the moviesequally, how much surplus does each personobtainfrom watching the movies?d. Is there any way to split the cost to ensure thateveryonebenefits? What practical problems doesthis solution raise?e. Suppose they agree in advance to choose theefficientnumber and to split the cost of themoviesequally. When Judd is asked his willingnessto pay, will he have an incentive to tell thetruth? If so, why? If not, what will he be temptedto say?f. What does this example teach you about theoptimalprovision of…
Suppose that there are three beachfront parcels of land available for sale in Asilomar and six people who would each like to purchase one parcel. Assume that the parcels are essentially identical and that the minimum selling price of each is $745,000. The following table states each person's willingness and ability to purchase a parcel. Person Willingness and Ability to Purchase (Dollars) Charles 900,000 Dina 810,000 Gilberto 770,000 Juanita 720,000 Lorenzo 690,000 Neha 680,000 Which of these people will buy one of the three beachfront parcels? Check all that apply. Charles Dina Gilberto Juanita Lorenzo Neha Assume that the three beachfront parcels are sold to the people that you indicated in the previous section. Suppose that a few days after the last of those beachfront parcels is sold, another essentially identical beachfront parcel becomes available for sale at a minimum price of $732,500. This fourth…