There is an excludeable public good. It will be provided by a club, which must fund the good through membership fees. Agents value the good differently, but the club manager knows the socially efficient level of the good. Consider the followng two properties. Which of these must be true for the manager to be able to set membership fees to fund the efficient level of the good? (i) The club manager knows each agents marginal valuation of the good at the efficient level. (ii) The club manager can charge different agents different membership fees. O a. Both (i) and (ii) must be true. O b. Only (ii) need be true. O c. Only (i) need be true. O d. Even if (i) and (ii) are true, this may not be possible.

There is an excludeable public good. It will be provided by a club, which must fund the good through membership fees. Agents value the good differently, but the club manager knows the socially efficient level of the good. Consider the followng two properties. Which of these must be true for the manager to be able to set membership fees to fund the efficient level of the good? (i) The club manager knows each agents marginal valuation of the good at the efficient level. (ii) The club manager can charge different agents different membership fees. O a. Both (i) and (ii) must be true. O b. Only (ii) need be true. O c. Only (i) need be true. O d. Even if (i) and (ii) are true, this may not be possible.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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