Ir Snip MB MBA MBB MBC MBD MBE a. A community of five individuals; Ali, Boy,...
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Ir Snip MB MBA MBB MBC MBD MBE a. A community of five individuals; Ali, Boy, Chia, Doc and Ed is planning to provide street lighting in their neighborhood. The marginal cost of providing the lighting is constant at RM880. The marginal benefit (demand) function of each individual for the different number of lights are summarized in the following table: b. C. d. e. Marginal Benefit of Number Street Light No. of Street Lights 300 250 220 350 210 2 250 210 180 300 170 3 Determine the Lindahl prices? 209 176 138 249 108 4 180 135 120 210 90 Determine the optimum quantity of the public good. 120 90 80 160 57 (5 points) (5 points) Show that the community will collect sufficient funds to pay for the optimum quantity of the public good. (4 points) If a tax is imposed by the government to provide the public good, what would be the number of street lights provided? (6 points) Discuss the differences in the funding mechanism between the tax imposition and the Lindahl model of the public good provision. Ir Snip MB MBA MBB MBC MBD MBE a. A community of five individuals; Ali, Boy, Chia, Doc and Ed is planning to provide street lighting in their neighborhood. The marginal cost of providing the lighting is constant at RM880. The marginal benefit (demand) function of each individual for the different number of lights are summarized in the following table: b. C. d. e. Marginal Benefit of Number Street Light No. of Street Lights 300 250 220 350 210 2 250 210 180 300 170 3 Determine the Lindahl prices? 209 176 138 249 108 4 180 135 120 210 90 Determine the optimum quantity of the public good. 120 90 80 160 57 (5 points) (5 points) Show that the community will collect sufficient funds to pay for the optimum quantity of the public good. (4 points) If a tax is imposed by the government to provide the public good, what would be the number of street lights provided? (6 points) Discuss the differences in the funding mechanism between the tax imposition and the Lindahl model of the public good provision.
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a The optimum quantity of the public good is 4 b The Lindahl prices are RM440 RM880 and RM1320 c The ... View the full answer
Related Book For
Microeconomics
ISBN: 9781464146978
1st Edition
Authors: Austan Goolsbee, Steven Levitt, Chad Syverson
Posted Date:
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