What is the efficient number of fireworks

Reference no: EM13178809

Janice (J) and Kelly (K) like fireworks displays. The marginal benefit curve for Janice is MBj=9-q. Kelly's MBk=27-3q. q is the total amount of fireworks consumed. The cost of every unit of fireworks is 4. Any fireworks one purchases can be enjoyed by the other at no cost to the other.

a. What is the efficient number of fireworks for this society?

b. Suppose the government decides to provide the efficient level of output found above. To pay for the fireworks, the government taxes J and K, using a Lindahl pricing scheme. What are the Lindahl prices?

c. If J and K pay their Lindahl prices, what is the consumer surplus for J and K, respectively? What is the total consumer surplus for this society from consuming fireworks?

d. Instead of their Lindahl prices, suppose J and K are each charged 2 per unit. How does this change the total consumer surplus for the society?

Reference no: EM13178809

Questions Cloud

Calculate the optimum production plan : Calculate the optimum production plan the firm should follow next year given the above constraints and calculate the maximum amount it would be worth the firm paying per hour, to rent an additional specialist machine.

What is the probability that marble will be green : what is the probability that it will be green?I did take one marble out of the bag; it was red. I set it aside. Now I am going to choose another marble at random. What is the probability that it will be green?

High value on activities : Placing a high value on activities in which we excel is especially likely to promote:

State the balanced net ionic equation : For the microscale titration between KMnO4 and H2O2 the balanced net ionic equation is 2 MnO4-(aq) + 5 H2O2(aq) + 6 H+(aq) --> 2 Mn2+(aq) + 5 O2(g) + 8 H2O(l)

What is the efficient number of fireworks : If J and K pay their Lindahl prices, what is the consumer surplus for J and K, respectively? What is the total consumer surplus for this society from consuming fireworks?d. Instead of their Lindahl prices, suppose J and K are each charged 2 per un..

State what is the theoretical yield of theresulting chalcone : 0.151 g ofpiperonaldehyde, and 0.80 mL of ethanol, and added 0.10 mL of NaHOsolution (0.60 g/mL), what is the theoretical yield of theresulting chalcone, in grams?

Explain symptoms victims will experience and display : Develop a comprehensive Recovery Plan for one of the Chemical Attack on the Super Bowl. Explain the specific agent used in the attack and the effects of the agent on victims, and surrounding areas, if appropriate. Explain symptoms victims will ex..

What is the least costly division of pollution abatement : In practice, the government would have to be very knowledgeable to divide up the pollution abatement between the plants in the least cost manner. Tradeable pollution permits are one way to get around this concern. Briefly explain why.e. If polluti..

Define what is the molecular formula of the compound : The molecular mass found by mass spectrometry is 210.06 amu. What is the molecular formula of the compound?

User Account

All Pages