The hypothetical city of Hurstville is trying to decide how many city beautification projects should be approved each year. These projects involve planting gardens, commissioning murals, and building fountains. The city has two types of citizens.Type B citizens appreciate beauty more than type A citizens. There is an equal number of each type of citizen. The accompanying graph depicts each type of citizen's marginal benefit for city beautification projects. The average cost of each project is $400. Use the information in the graph to answer the questions. Use the interactive points to draw the marginal social benefits (MSB) curve. What is the optimal quantity of city beautification projects? Marginal benefit / Marginal cost ($) 1,000 900 800 600 500 400 300 200 2 Incorrect projects Incorrect City beautification is a public good because: it is nonrival in consumption and nonexcludable. 700 MSB 100 MB 0 MB M B A 0 1 2 3 4 5 Quantity of projects MSC 6 7 8 9 10
The hypothetical city of Hurstville is trying to decide how many city beautification projects should be approved each year. These projects involve planting gardens, commissioning murals, and building fountains. The city has two types of citizens.Type B citizens appreciate beauty more than type A citizens. There is an equal number of each type of citizen. The accompanying graph depicts each type of citizen's marginal benefit for city beautification projects. The average cost of each project is $400. Use the information in the graph to answer the questions. Use the interactive points to draw the marginal social benefits (MSB) curve. What is the optimal quantity of city beautification projects? Marginal benefit / Marginal cost ($) 1,000 900 800 600 500 400 300 200 2 Incorrect projects Incorrect City beautification is a public good because: it is nonrival in consumption and nonexcludable. 700 MSB 100 MB 0 MB M B A 0 1 2 3 4 5 Quantity of projects MSC 6 7 8 9 10
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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