Asing 5 econ
Bill owns 3 acres of beautiful wooded land. When Bill decides to move to be closer to his grandchildren, he donates the land to the state with the understanding that the land will be used as a state park. This state park is large enough that it is not congested. It is an example of a good that is neither rival in consumption nor excludable.
9. You are the mayor of a small town with 2,000 residents. The head of your economic development agency recently conducted a survey in which the 2,000 residents said that a public concert in the center of town would be worth $20 to each of them. Since the concert cost only $5,000 to hold, you organized and held the concert, which everyone in town enjoyed. But when you asked for donations to pay for the concert, you only collected $300. You are convinced that
d residents of the town were probably free-riders at the concert.
10. National defense is a classic example of a public good because b it is difficult to exclude people from receiving the benefits from national defense once it is provided. 11. The Tragedy of the Commons describes b overuse of a common resource relative to its economically efficient use.
The town of Sointenly does not have any public snow-plows. Anyone who wants their street cleared of snow must hire a private snow-plow company to do it for $75. Curly, Larry and Moe all live on a dead-end street, with Curly living at the very end of it. Each one values snow removal at $50. At present, the snow is never cleared from the street. We can conclude that a. the current situation is best because the cost of snow removal exceeds what each of them is willing to pay for it. b. Larry and Moe should wait for Curly to pay for the service because if the snow is cleared all the way to Curly’s house, Larry and Moe will get the service for free. c. the fee charged by the snow removal company is unfairly high. d. Curly, Larry and Moe could all be better off if they acted collectively.
ANSWER: d. Curly, Larry and Moe
9. You are the mayor of a small town with 2,000 residents. The head of your economic development agency recently conducted a survey in which the 2,000 residents said that a public concert in the center of town would be worth $20 to each of them. Since the concert cost only $5,000 to hold, you organized and held the concert, which everyone in town enjoyed. But when you asked for donations to pay for the concert, you only collected $300. You are convinced that
d residents of the town were probably free-riders at the concert.
10. National defense is a classic example of a public good because b it is difficult to exclude people from receiving the benefits from national defense once it is provided. 11. The Tragedy of the Commons describes b overuse of a common resource relative to its economically efficient use.
The town of Sointenly does not have any public snow-plows. Anyone who wants their street cleared of snow must hire a private snow-plow company to do it for $75. Curly, Larry and Moe all live on a dead-end street, with Curly living at the very end of it. Each one values snow removal at $50. At present, the snow is never cleared from the street. We can conclude that a. the current situation is best because the cost of snow removal exceeds what each of them is willing to pay for it. b. Larry and Moe should wait for Curly to pay for the service because if the snow is cleared all the way to Curly’s house, Larry and Moe will get the service for free. c. the fee charged by the snow removal company is unfairly high. d. Curly, Larry and Moe could all be better off if they acted collectively.
ANSWER: d. Curly, Larry and Moe