Consider the Deacon and Sonstelie (1985) approach to valuing time described in the text on p. 216. Imagine that two cars are equivalent to one another in every way (such as gas mileage) except for gas tank size, and car A’s tank has twice the gas capacity of car B’s tank. Which driver is more likely to patronize a Chevron station mandated to lower prices below those of independent stations? Explain your answer.
Answer to relevant QuestionsA city government is considering building a new system of lighted bike paths. A council or supporting their construction lists the following as potential benefits of the paths: (1) more enjoyable bike rides for current and ...The U.S. Office of Management and Budget (OMB) recommends that the government use different discount rates for public investments than for the sale of government assets. For public investments, the OMB suggests a discount ...Matsusaka (1995) showed that states that provide for voter initiatives tend to have smaller government growth than do states without such a provision. Why might this be so? Alfie, Bill, and Coco each value police protection differently. Alfie’s demand for the public good is Q = 55 – 5P, Bill’s demand is Q = 80 – 4P, and Coco’s demand is Q = 100 – 10P. If the marginal cost of ...Think about two public goods—public schools and food assistance for needy families. Consider the implications of the Tiebout model. Which of the goods is more efficiently provided locally? Which is more efficiently ...
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