Reference no: EM133065181
Consider a community of 3 households. The marginal benefit/inverse demand for police protection services (denoted as S) for each household is given below:
MB1 = 200 - 2S
MB2 = 100 - S
MB3= 50 - S
The marginal cost of providing police protection services is 150 per unit. Police protection services are a non-rival good. The community is committed to treating the police protection services as nonexcludable.
c.Suppose instead the three households agree to divide up the costs based upon income. The share of costs per unit to a household will be equal to the proportion of community income the household earns. If incomes are distributed: Income 1 = 40,000, Income 2 = 40,000, Income 3 equals 120,000, what quantity of police protection services will be chosen in equilibrium under a majority voting process?
d.Does the solution in Part c. seem fair to you? Discuss briefly.
e.What is the increase in consumer surplus for household 1 in moving from the non-cooperative equilibrium to the median voter public equilibrium? What is the loss in consumer surplus for household 3 in moving from the non-cooperative equilibrium to the median voter public equilibrium? (Assume that MB3 = 0 for all S ≥ 50).
|
Successful without gathering sufficient data
: A marketing campaign would not be successful without gathering sufficient data. What information can help the hospital stay competitive?
|
|
Economic implications on market power
: Most Apple users are very committed to Apple products, despite the fact that there are substitute products made by other firms (e.g., Google and Microsoft produ
|
|
Formula for the firm average fixed costs
: Suppose a firm's plant produces Q units in any given year. The plant itself operates with annualized costs of $10M and other annual fixed expenses totaling $3M.
|
|
Give the adjusting entry in the general journal
: Give the adjusting entry in the General Journal to recognize the employee and employer share of the payroll for the week of August 31
|
|
What is the increase in consumer surplus
: Consider a community of 3 households. The marginal benefit/inverse demand for police protection services (denoted as S) for each household is given below:
|
|
What are the variable and fixed manufacturing costs
: Flagstags Brewery's flexible budget estimates are $74,000, $77,000, and $80,000 to manufacture 4,000, What are the variable and fixed manufacturing costs
|
|
Find value of yen in exchange for dollars
: The demand for yen in exchange for dollars will decrease if, ceteris paribus
|
|
Bargaining power of a property rights owner
: Explain how, with use of an example, a right to an injunction increases the bargaining power of a property rights owner.
|
|
Estimating the cost of living
: Consider an economy producing the following products: bread and cars. Use the information provided in the following table to answer the question below:
|