Microeconomics
2nd Edition
ISBN: 9780073375854
Author: B. Douglas Bernheim, Michael Whinston
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 1, Problem 7DQ
To determine
Identify the natural experiment.
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Suppose that Timmy lives in a neighborhood where graffiti is common. People's cars and the sides of houses are often
vandalized with graffiti
In response to the vandalism, the people in the neighborhood have proposed a voluntary community fund to pay for extra
police patrols. There are 1000 people in Timmy's neighborhood, and each is recommended to contribute $10 a month
Timmy's car has recently been vandalized and he is concerned it may happen again. Although he believes that he will benefit
from the extra police patrols, Timmy has decided to take a free-rider approach
Given his thinking, how much will Timmy contribute to the fund?
Timmy's contribution: $
Assume that the entire neighborhood has the same mentality as Timmy. What will occur?
The rate of graffiti in the neighborhood will increase significantly
Everyone will contribute money towards the community fund, yielding higher rates of police patrol and less graffiti
No one will contribute to the community fund, resulting in no…
Please answer fast please help arjent
Homer consumes only donuts and beer. When he consumes less than 10 beers, Homer would gladly drink one more. After drinking 10 beers, Homer is so drunk that he does not notice any additional bottle he drinks (that is, the benefit of an additional bottle of beer is zero). Drinking more than 17 beers is beyond the processing capability of Homer's liver and any additional bottle makes him sick (beer is no longer a "good" for Homer). Homer's preferences for donuts are similar. As long as he eats less than 15 donuts, an additional donut increases his utility. If he eats between 15 and 20 donuts, then additional donuts do not bring him any additional utility, and if he eats more than 20 donuts, then additional donuts make him worse off. 1. Sketch Homer's indifference curve passing through point (8 donuts, 8 beers). 2. Sketch Homer's indifference curve passing through point (16 donuts, 16 beers)
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