Question: Consider a small town deciding whether to build a public park. The town council conducts a survey of its 100 residents and asks them how

Consider a small town deciding whether to build a public park. The town council conducts a survey of its 100 residents and asks them how much they would each value the park. The survey results are as follows:

a. Suppose it costs $35 000 to build the park. Should the town do it?
b. Suppose the park costs only $20 000 to build. Should the town build the park? If so, how should the town pay for building the park?
c. Suppose the town builds the park but charges people $50 for an annual pass. Does this present a problem for efficiency? Explain.

Number of people 10 30 30 20 10 100 Value of park per person $1000 500 200 50 Total $10 000 15 000 6 000 1 000 0 S32 000

Step by Step Solution

★★★★★

3.38 Rating (164 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a The total value placed on the park by the 100 residents is 32 000 If the cost to build the park is ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

702-B-E-D-S (1442).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

Give an example of managerial accounting information that could help a manager make each of the following decisions. 1. The president of Bridge Rent-a-Car is deciding whether to add luxury cars to...

Classify each of the following costs as relevant or irrelevant to the decision at hand and briefly explain your reason. a. The interest rate paid on invested funds when deciding how much inventory to...

Classify each of the following costs as relevant or irrelevant to the decision at hand and briefly explain your reason. a. The purchase price of the old computer when replacing it with a new computer...

Chamberlain College of Nursing NR443 Community Health Nursing Caring for Populations: Milestone1: Community Windshield Survey Form Directions: Please refer to the Milestone 1: Community Windshield...

Discussion Topic Read the case study, Redeveloping Mission and the 'Driveway Tax' Controversy". In the Discussion, your initial post should address the following questions. Compare the differences...

With the given information, if the case involves a company's or manager's actions, evaluate what the company or manager did or did not correctly in handling the issue affecting it. How should actions...

Questions for Discussion 1. What are the major issues in this case? What does Walmart's experience tell you about the business and society relationship? 2. Assess Walmart's corporate social...

MGT 3090 Prof. Si Ahn Mehng Conflict Styles Inventory Instructions: The Conflict Styles Inventory consists of eight common community conflict situations. After reading each situation, you will need...

Daenerys has an income of $100 to spend on apples (good z) and bananas (good y). Her utility function is given as u(z. y) = 2007 The price of apples is $2, and the price of bananas is $1. (a) Write...

Describe the relationship between planning and the other general functions of management (organizing, controlling, and influencing). In your opinion, which of the four functions is most important?

Which of the following most accurately describes the main advantages of investing in REITs? ( I ) REITs provide a relatively high dividend yield to investors. ( II ) REITs provide a high potential...

Explain why a perfectly competitive firm would or would not advertise.

1. Economic profit equals ________minus________. 2. Economic cost equals ________cost plus ________cost. 3. For a perfectly competitive firm, marginal revenue equals ________, and to maximize profit,...

1. A firm will continue to operate an unprofitable business if _________exceeds _________cost. 2. Your firm has a total revenue of $500, a total cost of $700, and a variable cost of $600. You should...

Bond S is a 4 percent coupon bond Bond T is a 10 percent coupon bond Both bonds have 11 years to maturity, make semiannual payments, and have a yield to-maturity o(7 percent It interest rates...

A financial calculator is recommended. Suppose a $1,100 5% bond with annual coupons and a redemption payment of $1,260 was purchased on February 23, 1995 at a price to yield the new buyer 8.2%...

Steel Corp. Industries has no debt, total equity capitalization of $600 million, and an equity beta of 1.2. Included in Steel Corp's assets is $90 million in cash and risk-free securities. Assume the...