Economics: Private and Public Choice
16th Edition
ISBN: 9781337642224
Author: James D. Gwartney; Richard L. Stroup; Russell S. Sobel
Publisher: Cengage Learning US
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Chapter 6, Problem 3CQ
To determine
Explain public choice analysis.
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Economics: Private and Public Choice
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- What is an externality? Provide two examples each of positive and negative externalities.arrow_forwardAn economist gives the following advice to a museum director: "You should introduce "peak pricing". At times when the museum has few visitors, you should admit visitors for free. And at times when the museum has many visitors, you should charge a higher admission fee." a) When the museum is quiet, is it rival or non-rival in consumption? Is it excludable or non-excludable? What %23 type of good-public or private - is the museum at those times? What would be the efficient price to charge visitors, and why? (I.e., should the price = $0, or should it be >$0?) %3D b) When the museum is busy, is it rival or non-rival in consumption? Is it excludable or non-excludable? What type of good is the museum at those times? What would be the efficient price to charge visitors, and why?arrow_forwardWhat is an externality? How do they affect market efficiency? If an externality is present, where is the socially optimal point of production? Where will the market produce if there is no government intervention? How do we get from the private market equilibrium to the socially optimal one?arrow_forward
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