. Consider five members of a community, Kwame, Amina, Edmond, Francis, and Naana who plan to provide...

 . 

Transcribed Image Text:

Consider five members of a community, Kwame, Amina, Edmond, Francis, and Naana who plan to provide mechanized bore-holes in their community which is suffering from acute water shortage. Their demand functions for the water are given by: Where, and are the demand functions of Kwame, Amina, Edmond, Francis, and Naana respectively? Also, the Marginal Cost (MC) for the bore-hole project is given by MC = 80 + 4Q (a) Assume that it is possible to exclude a member from using the bore-hole upon provision; determine the optimal quantity of bore-holes be provided. (b)Assume that it is impossible to exclude members from using the bore hole being provided, what is the optimal number of bore holes that will be provided? (c)If the bore-hole is financed by the government, determine how much tax each should pay in order to generate adequate funds to provide the bore-hole project. Assume there is no free riding by any of the members and that there is a true preference revelation by all. (d)State and briefly explain three (3) potential challenges associated with the provision of such public goods. Consider five members of a community, Kwame, Amina, Edmond, Francis, and Naana who plan to provide mechanized bore-holes in their community which is suffering from acute water shortage. Their demand functions for the water are given by: Where, and are the demand functions of Kwame, Amina, Edmond, Francis, and Naana respectively? Also, the Marginal Cost (MC) for the bore-hole project is given by MC = 80 + 4Q (a) Assume that it is possible to exclude a member from using the bore-hole upon provision; determine the optimal quantity of bore-holes be provided. (b)Assume that it is impossible to exclude members from using the bore hole being provided, what is the optimal number of bore holes that will be provided? (c)If the bore-hole is financed by the government, determine how much tax each should pay in order to generate adequate funds to provide the bore-hole project. Assume there is no free riding by any of the members and that there is a true preference revelation by all. (d)State and briefly explain three (3) potential challenges associated with the provision of such public goods.

Answer rating: 100% (QA)

Let Q be the optimal quantity of boreholes to be provided The demand functions for Kwame Amina Edmond Francis and Naana respectively can be written as Kwame DKwameQ 140 5Q Amina DAminaQ 120 3Q Edmond ... View the full answer