5. What would be society's surplus under these fees? {Hint: remember that the surplus canbe measured as an area} Surplus-public=6. Assuming that individuals do not know each other marginal benefit, is it likely that at leastsome of them will free ride when asked to reveal their preferences and be chargedaccordingly? (Y/N)7. Is public provision surely going to be at the efficient level? (Y/N)8. In this setting, is private provision likely to be less efficient than public one? (Y/N) Now a small country inhabited by 100 people has to decide whether or not to create a nationalbroadcaster and how to finance it. The alternative could be a perfectly competitive private market.Let capital X be the number of media services (TV channels and radio stations) offered by thebroadcaster(s), and small x be the number of media services consumed by a single individual. Allindividuals in the country have the same marginal benefit from media services, equal to 10-x. Themarginal cost of providing an additional media service is constant and equal to 200 per mediaservice. This can be interpreted as the marginal cost for the national broadcaster, or the marketsupply in the case of a private market. Assume that advertising on national broadcasters is notallowed by constitution. Answer the following:

5. Surplus-public=Society have a better services. 6. YES

be measured as an area} Surplus-public= 6. Assuming that individuals do not know each other marginal benefit, is it likely that at least some of them will free ride when asked to reveal their preferences and be charged accordingly? (Y/N) 7. Is public provision surely going to be at the efficient level? (Y/N) 8. In this setting, is private provision likely to be less efficient than public one? (Y/N)

be measured as an area} Surplus-public= 6. Assuming that individuals do not know each other marginal benefit, is it likely that at least some of them will free ride when asked to reveal their preferences and be charged accordingly? (Y/N) 7. Is public provision surely going to be at the efficient level? (Y/N) 8. In this setting, is private provision likely to be less efficient than public one? (Y/N)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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