QUESTION 32 Pam and Kunal are the only members of a community that is trying to determine how much of a public good should be produced. Suppose that Pam is willing to pay $10 for the fourth unit of the public good and that Kunal is willing to pay $6 for the fourth unit. The marginal cost of producing the public good is constant at $4. Which is TRUE? O a. Fewer than four units of the public good should be produced. O b. More than four units of the public good should be produced. O c. Exactly four units of the public good should be produced. Od. The Lindahl equilibrium is established when the price of the public good is $10.
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- Use the diagram below, which indicates maximum combinations of good X and good Y that can be produced with available resources, to answer the question. On production possibility curve AC Good Y B A 0 OF E Good X C O A. output combination A and C represents less efficient resource use than either D or E. O B. output combination D represents the most efficient use of resources. O C. output combinations A, D, E and C all represent full and efficient resource use. O D. output combinations D and E represent full and efficient use of resources, but A, C and F represent inefficient resource use.2. Suppose the Harrisonburg city council is concerned about the increase in crime in the city. Crimes in H'burg are inefficient in the sense that it costs society $20,000 more than the benefits to the criminal. If an offender is caught, tried and convicted they are sent to jail. Assume that the total social cost of trial, conviction, and punishment is $150,000 per criminal caught. The council is considering hiring additional police officers dedicated to detecting crime. This change would increase the fraction of offenders who are caught from 20% to 30%. The city estimates that this will decrease the number of crimes from 2,000 a year to either 1,200 or 1,600 per year. For each case: 1,200 or 1,600: For each question, make sure you justify your work and provide a clear explanation. a. What happens to the social cost of crimes committed? b. What happens to the cost of trying, convicting, and punishing offenders? c. What is the most that the city should be willing to pay for the new…Figure 1 below shows two production possibilies frontiers (PPFs). The solid one isthe original one. The dashed one is the PPF after a technological advance that hasbenefitted only the Y indusry. As an example, think of the invention of fruitpicking robots that benefits only agricultural production and is of no use insoftware production.Figure 2 shows the marginal social benefit (MSB) of X production in terms ofsacrifices of Y. For example, to produce the first unit of X, the society is willing togive up 40 units of Y. For the second unit the socirty is willing to sacrifice only 35units of Y.Before the technological advance:1. What are the marginal social costs (MSCs) of producing the second,third, and the fourth units of X in terms of the sacrifices of Y. Do youremember the reasons for these results?2. What are the allocatively efficient quantities of X and Y?3. Suppose that due to some good news about various health benefits of X,the marginal social benefit of X increases by 10 units…
- Figure 1 below shows two production possibilies frontiers (PPFs). The solid one isthe original one. The dashed one is the PPF after a technological advance that hasbenefitted only the Y indusry. As an example, think of the invention of fruitpicking robots that benefits only agricultural production and is of no use insoftware production.Figure 2 shows the marginal social benefit (MSB) of X production in terms ofsacrifices of Y. For example, to produce the first unit of X, the society is willing togive up 40 units of Y. For the second unit the socirty is willing to sacrifice only 35units of Y.Before the technological advance:1. What are the marginal social costs (MSCs) of producing the second,third, and the fourth units of X in terms of the sacrifices of Y. Do youremember the reasons for these results?2. What are the allocatively efficient quantities of X and Y?3. Suppose that due to some good news about various health benefits of X,the marginal social benefit of X increases by 10 units…Question 1 We may get less than the socially optimal amount of litigation because O A, because case law (law derived from court decisions) is a public good O B. because the people who benefit from the clarification of laws as a result of litigation often do not contribute anything toward the cost of the litigation, which is borne by the parties to the lawsuit. O, the litigants are concerned about their legal costs and their expected benefit of litigation, but have little concern about the social benefits. O D. Only B and C are correct. O E. All of the above.The three residents of Smallville are consideringa fireworks display. Clark values this public goodat $80; Lana at $50; and Pete (who dislikesfireworks) at −$30. Fireworks cost the town $120,or $40 per person. The efficient outcome is for thetowna. to provide the public good because the medianperson values it more than its cost per person.b. to provide the public good because a majorityof the residents value it more than its cost perperson.c. to provide the public good because the total valueof a majority exceeds the total cost.d. not to provide the public good because the totalvalue of all residents is less than the total cost.
- The graph shows the competitive market for fitness trackers. Draw a point that shows the efficient quantity of fitness trackers and the marginal social benefit and marginal social cost at the efficient quantity. Label it Efficient. Choose the statement that is correct. O A. At the competitive equilibrium, the market for fitness trackers achieves allocative efficiency. B. If production in the market for fitness trackers is less than the equilibrium quantity, the marginal fitness tracker costs more to produce than the value that consumers place on it. OC. The competitive market pushes the quantity of fitness trackers produced beyond its efficient level. O D. The market for fitness trackers is not in the social interest because buyers and sellers act only in their self-interest. 240- 200- 160- 120- 80- 40- 0- Price (dollars per fitness tracker) 0 D 2 6 8 10 12 14 16 Quantity (millions of fitness trackers per year) >>> Draw only the objects specified in the question. S10. Use a production possibility frontier to describe and explain the idea of efficiency, as economists use that term.Suppose the Environmental Protection Agency (EPA) wants to mandate that all methane emissions must be reduced to zero in order to alleviate global warming in the United States. Which of the following describes why most economists would disagree with this policy? O The opportunity cost of zero pollution is much higher than its benefit. O The environment isn't worth protecting. O Reducing methane emissions is desirable, but whatever levels of pollution firms decide to emit privately are already efficient. O Society would not benefit from lower air pollution.
- Refer to the above table and answer the question on the basis of the given information for a public good. TH Quantity 1 PR $10 Ps $8 2 7. 7 3 5 6 4 3 5 1 4 PRand Psare the prices that Rafael and Sarah, respectively, are willing to pay for the marginal unit of a public good, rather than do without it. Rafael and Sarah are the only members of society. Now suppose the public good can be provided by the government at a constant marginal cost of $10. The optimal quantity of the public good is: 1) 1 unit. 2) 2 units. 3) 3 units. 4) 4 units. vonlstWhich of the following statements is TRUE based on the Production Possibility Frontier below? Check all the answers that are true. 16 15 12 b. O c. 8 Number of Computers 2 C A 4 D B Production Possibilities Frontier 6 E 8 G PPF F Com (in tons) Select one or more: O a. It is possible to produce 10 computers and 6 tons of corn based on the PPF Point C is more efficient than point E If 4 tons of corn and 4 computers are produced, it is possible to produce 8 more computers d. Point A is feasible but inefficient Oe. Point G is feasible but not efficient1. What is an example of a good that has become a public (or quasi-public) good due to technology? 2. Explain how technology has made this good non-rival in consumption or non-excludable. 3. Is there a free rider problem in the good you mentioned? How can the free rider problem be addressed in that example?