What would be the socially efficient level

Reference no: EM132138880

Question - A collectivity consists of three persons, A, B, C. Demand for some collectively provided service, x, being for person A, P = 40/x; for person B, P = 20/x; and for person C, p = 10/x. The marginal cost is 10.

(i) What is the SMB (social marginal benefit) function/curve for this community?

(ii) What would be the socially efficient level of x according to the Benefit principle or Samuelson condition?

(iii) What would be the level of x according to majority rule with equal head tax?

(iv) Did the majority rule in democracy produces efficient amount of public good?

Reference no: EM132138880

Questions Cloud

Explain the price andquantity of kevin cakes : Suppose Kevin is operating a cake shop at a perfectlycompetitive market in South Korea and producingat the shutdown point.

How much labor should the firm employ : Making dresses is a labor-intensive process. Indeed, the production function of a dressmaking firm is well described by the equation Q = L - L2/800.

What happens in the event of breach of the contract : Have you ever done business with this party? Are you merchants or nonmerchants? What type of clauses should be included?

Discuss combination of factors related to management : Materiality and Risk. Dag Nilsson, Auktoriserad Revisor (AR), considers the audit risk at the financial statement level in the planning of the audit.

What would be the socially efficient level : A collectivity consists of three persons, A, B, C. What would be the socially efficient level of x according to the Benefit principle or Samuelson condition

Explain the five types of business structures : Create a comparison matrix that shows the 5 types of business structures and compares and contrasts type of structure.

Determine which route should be selected : Two routes are under consideration for a new interstate highway segment. The long route would be 25 kilometers and would have an initial cost of $21 million.

The relationship between law and ethics : How have lower courts interpreted the Branzburg v. Hayes decision based on whether the cases involved civil, criminal, or grand jury proceedings?

Determine the future worth at the end of year : Determine the future worth at the end of year 10 of a cash flow series that starts 2 years from now at $125,000 and decreases by 8% per year

User Account

All Pages