What is the price of additional dollar of local spending

Assignment Help Business Economics
Reference no: EM133081804

The state of California is considering funding local protection for forest wildfires. Forests are a valuable resource and protecting them could be considered a public good. The state has two alternative methods of funding: lump-sum grants and matching grants. In the case of matching grants, the state of California will spend $1 for each $1 spent by local governments on forest protection from wildfires. In the case of lump-sum grants, the state will just give fixed dollar amounts to different localities.

(a) What is the price of additional dollar of local spending in each type of grants?

(b) If the dollar value of both types of grants to a locality is same, which type of grant will lead to higher levels of spending on forest protection? Explain using the concept of income and substitution effects

(c) The national government recognizes the importance of saving forests from wildfires and announces a matching grant with a matching rate of 0.8. As a result, a local government now receives two matching grants, one from state (R = 1) and one from federal government (R = 0.8). What is the price of additional dollar of local spending with these two grants?

Reference no: EM133081804

Questions Cloud

Song brings back memories of the good times : Gladys cries each time she hears a song on the radio that she and her ex-boyfriend used to enjoy. Hearing the song brings back memories of the good times they h
Describe the alternative paths a firm : (a) Describe the alternative paths a firm may take in its effort to globalize the cost and availability of capital.
Find the profit of individual firm : For a perfectly competitive firm , suppose that all fixed cost is sunk and total fixed cost is 200 and average variable cost is 4 + 0.02q.
Determine market equilibrium for all possible combination : Consider a horizontally differentiated product market in which two firms are located at any points l1 and l2 on the real line, respectively, with the notation l
What is the price of additional dollar of local spending : The state of California is considering funding local protection for forest wildfires. Forests are a valuable resource and protecting them could be considered a
Framework of the prsa code of ethics : The following dilemmas should be discussed within the framework of the PRSA code of ethics.
Estimate the remaining book value : Estimate the Remaining Book Value of the building in 2029 if BizTech decides to sell the building on February 15th 2029 for $1,081,899.
Determine the depreciable life of the apartment building : A local contractor purchased a building in downtown Houghton in 2018. In 2019, the contractor began renovating the building to convert the office space into apa
Benefits of export sales subsidiaries : Ease of financing and tax advantages are benefits of export sales subsidiaries.

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd