The hypothetical city of Hurstville is trying to decide how many city beautification projects should be...
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The hypothetical city of Hurstville is trying to decide how many city beautification projects should be approved each year. These projects involve planting gardens, commissioning murals, and building fountains. The city has two types of citizens. Type B citizens appreciate beauty more than type A citizens. There is an equal number of each type of citizen. The accompanying graph depicts each type of citizen's marginal benefit for city beautification projects. The average cost of each project is $400. Use the information in the graph to answer the questions. Use the interactive points to draw the marginal social benefits (MSB) curve. What is the optimal quantity of city beautification projects? 1,000 Marginal benefit / Marginal cost ($) 900 800 700 600 500 400 300 200 100 0 0 MSB 1 2 MB A MB B 3 4 5 6 Quantity of projects 7 8 MSC 9 10 The hypothetical city of Hurstville is trying to decide how many city beautification projects should be approved each year. These projects involve planting gardens, commissioning murals, and building fountains. The city has two types of citizens. Type B citizens appreciate beauty more than type A citizens. There is an equal number of each type of citizen. The accompanying graph depicts each type of citizen's marginal benefit for city beautification projects. The average cost of each project is $400. Use the information in the graph to answer the questions. Use the interactive points to draw the marginal social benefits (MSB) curve. What is the optimal quantity of city beautification projects? 1,000 Marginal benefit / Marginal cost ($) 900 800 700 600 500 400 300 200 100 0 0 MSB 1 2 MB A MB B 3 4 5 6 Quantity of projects 7 8 MSC 9 10
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Macroeconomics
ISBN: 978-0321675606
6th Canadian Edition
Authors: Andrew B. Abel, Ben S. Bernanke, Dean Croushore, Ronald D. Kneebone
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