Question: Britney and Paris are neighbors During the winter it is
Britney and Paris are neighbors. During the winter, it is impossible for a snowplow to clear the street in front of Britney’s house without clearing the front of Paris’s. Britney’s marginal benefit from snowplowing services is 12 - Z, where Z is the number of times the street is plowed. Paris’s marginal benefit is 8 - 2Z. The marginal cost of getting the street plowed is $ 16. Sketch the two marginal benefit schedules and the aggregate marginal benefit schedule. Draw in the marginal cost schedule, and find the efficient level of provision for snowplowing services
Answer to relevant QuestionsAirlines now charge passengers a fee for each piece of checked luggage, but they do not charge for carry- on luggage brought onto the plane. If overhead luggage containers fill up, the airline then checks luggage for free at ...Denmark recently instituted a “ fat tax,” which charges about $ 3 per kilogram of saturated fat in food. One commentator criticized the tax as inefficient, because it taxes an input to health rather than a health outcome ...Figure 5.11 demonstrates the efficiency implications of using cap- and- trade versus an emissions fee when costs are higher than expected and marginal social benefits are inelastic. Figure 5.12 does the same thing under the ...Consider a society with three people (John, Eleanor, and Abigail) who use majority rule to decide how much money to spend on schools. There are three options for spending on a public park: H (high), M (medium), and L (low). ...A project yields an annual benefit of $ 25 a year, starting next year and continuing forever. What is the present value of the benefits if the interest rate is 10 percent? Generalize your answer to show that if the perpetual ...
Post your question