Say a public good is provided to two consumers: John and Jill. John's willingness to pay for the good is P = 10 - Q, and Jill's is P = 20 - 2Q. The marginal cost to provide the good are 2Q. Assume the government must pay for providing this good by taxing Jill and John equally to raise the necessary revenue. If the total costs of providing the public good are $25, then
A. both Jill and John would be willing to vote to approve of providing the good.
B. only John would be willing to vote to approve of providing the good.
C. only Jill would be willing to vote to approve of providing the good.
D. neither Jill nor John would be willing to vote to approve of providing the good.
Answer: A
You might also like to view...
Consumption expenditure is the payment by households for consumption of
A) goods but not services. B) services but not goods. C) goods and services. D) services and for saving.
Suppose the current exchange rate between the Japanese yen and the U.S. dollar is 80 yen = $1. Suppose you can buy more goods in the United States with $10 than you can in Japan with 800 yen. Japan's GDP in dollars will be
A) greater if the current exchange rate, rather than the purchasing power parity exchange rate, is used to convert yen to dollars. B) less if the current exchange rate, rather than the purchasing power parity exchange rate, is used to convert yen to dollars. C) the same whether the current exchange rate or the purchasing power parity exchange rate is used to convert yen to dollars. D) more accurate if the current exchange rate, rather than the purchasing power parity exchange rate, is used to convert yen to dollars.
The assumption that X has full column rank implies that
A) the number of observations equals the number of regressors. B) binary variables are absent from the list of regressors. C) there is no perfect multicollinearity. D) none of the regressors appear in natural logarithm form.
If the production possibilities curve in France is bowed out and the curve in Spain is a straight line, then we know that
a. no trade can take place between France and Spain b. the terms of trade will always be in favor of France c. the terms of trade will always be in favor of Spain d. the law of increasing costs apply to France but not to Spain e. the law of increasing costs apply to Spain but not to France f. the opportunity costs of producing goods in France are constant