Question: Jack and Jill are the only two residents in a neighborhood, and they would like to hire a security guard. The value of a security

Jack and Jill are the only two residents in a neighborhood, and they would like to hire a security guard. The value of a security guard is $50 per month to Jack and $150 per month to Jill. Irrespective of who pays the guard, the guard will protect the entire neighborhood.
a. What is the most a guard can charge per month and still be assured of being hired by at least one of them?
b. Suppose the competitive wage for a security guard is $120 per month. The local government proposes a plan whereby Jack and Jill each pays 50 percent of this monthly fee, and asks them to vote on this plan. Will the plan be voted in? Would economic surplus be higher if the neighborhood had a guard?

Step by Step Solution

★★★★★

3.47 Rating (160 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Jack and Jill hire a security guard part 1 a The most the guard can charge is 150 si... 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)

659-B-E-D-S (364).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

1. Given the facts of the case, what communications do you believe Forrester & Loomis should have made with the audit committee with regard to the transactions with the vendor to comply with PCAOB AS...

Jack and Jill are owners of UpAHill, an S corporation. They own 25 and 75 percent, respectively. a. What amount of ordinary income and separately stated items are allocated to them for years 1 and 2...

Jack and Jill are married. This year Jack earned $72,000 and Jill earned $80,000 and they received $4,000 of interest income from a joint savings account. How much gross income would Jack report if...

Jack and Jill are married and have three dependent children, and they file a joint return in 2014. If they wish to minimize their federal income tax liability and have adjusted gross income (AGI) of...

4 Chec Jack and Jill are the only two residents in a neighborhood, and they would like to hire a security guard. The value of a security guard is $50 per month to Jack and $150 per month to Jill. The...

Problem 14-07 [alga] Jack and Jill are the only two residents in a neighborhood, and they would like to hire a security guard. The yalue of a security guard is $50 per month to Jack and $00 per month...

1. Jack and Jill are the only two residents in a neighborhood, and they would like to hire a security guard. The value of a security guard is $50 per month to Jack and $150 per month to Jill....

Jack and Jill are the only two residents in a neighborhood, and they would like to hire a security guard. The value of a security guard is $50 per month to Jack and $150 per month to Jill....

Jack and Jill are the only two residents in a neighborhood, and they would like to hire a security guard. The value of a security guard is $80 per month to Jack and $150 per month to Jill....

Jack and Jill are the only two residents in a neighborhood, and they would like to hire a security guard. The value of a security guard is $ 1 6 0 per month to Jack and $ 1 5 0 per month to Jill....

Ross and Jessica are married and have one child who is two years old. Ross is a recent college graduate and works as a software engineer. Jessica is a full-time student at Hendrick College, and...

Let f(x, y) = 4 - x2 + y2. (A) Explain why f{a,b) = f{c,d) whenever (a, b) and (c, d) are points on the same circle with center at the origin in the xy plane. (B) Describe the cross sections of the...

An object is moving horizontally. The object's displacement, s , in metres at t seconds is described by s ( t ) = 2 t 3 - 7 t 2 4 t . ( 6 marks ) a . Find the velocity and acceleration at t = 2 . b ....

a) For a charged particle, magnetic field, = 2y +2x 2 ; electric field, = 2y 2 +9z ; velocity, = 2x and q=1. Find out the Lorentz force on that particle. b) A parallel plate capacitor which has plate...

[20 pts] Alcohol Flushing Syndrome Humans with the "alcohol flushing syndrome" (AFS) tend to flush red after consuming ethanol. When an individual with AFS consumes alcohol, acetaldehyde accumulates...

a) What happens in the thoracic cavity to cause this condition? (Use appropriate terminology from our lecture slides to describe it.) b) How would this affect the intrapleural pressure?...

Anna is currently in charge of the Harvard book shops in Cambridge, Boston. She suspects that the demand for books is related to the pace of the academic year and to the weather conditions. Anna...

How are we addressing tax complexities resulting from online sales due to new sales tax legislation?

Assume that the marginal private costs of a firm producing fuel-efficient cars is greater than the marginal social costs. Assume that the marginal private benefits of a firm producing fuel-efficient...

HighFlyer Airlines wants to build new airplanes with greatly increased cabin space. This will allow HighFlyer Airlines to give passengers more comfort and sell more tickets at a higher price....

In the Land of Purity, there is only one form of pollution, called gunk. Table 12.14 shows possible combinations of economic output and reduction of gunk, depending on what kinds of environmental...

o Acompany sellt long-term mainlerance contracts for computer equimect. On December 15, 2020, it sels a 3-year contract to Customer A, receiving $15,000 cash. The Merch 31,20217 A. 51.500 B. 51,250 C...

An unfair ( one side is more probable, say p , than the other ) coin is flipped until the first head occurs. Let X denote the number of flips required. Find the entropy H ( X ) in bits. The following...

Write a function (subroutine) that inputs a data value in register r0 and returns value in r0. The function returns y 5 a 1 bx 1 cx2, where a, b, and c are parameters built into the function (i.e.,...