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

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question
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
Transcribed Image Text: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
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education