The graph shows costs and benefits of a mosquito control program, which is a public good:
a) What is the quantity of spraying that achieves efficiency?
b) What is the political equilibrium if voters are well informed?
a) Efficiency is reached at the quantity where marginal social benefit equals marginal social cost, i.e. at 5 square miles per day.
b) If voters are well informed, the political equilibrium will be the efficient quantity of spraying, 5 square miles per day.
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Economic developments after the Civil War (1861–1865) in the South include all of the following except
(a) A decline in cotton prices with the result that poverty associated with cotton became a fixed feature of the South (b) The relatively widespread land ownership among the freed slaves (c) The widespread adoption of the sharecropping system (d) The widespread debt peonage for the freed slaves
Season ticket holders for the St. Louis Rams received a surprise when they read the applications forms to renew their season tickets. In order to get their season ticket to the Rams' home games, they also had to buy tickets to the preseason games
Many season ticket holders grumbled about this practice as an underhanded way for the St. Louis Rams to get more money from its season ticket holders. This practice is an example of: A) peak-load pricing. B) intertemporal price discrimination. C) two-part tariff. D) bundling. E) Both A and B are correct.
Potential buyers of ABC Corporation bonds are concerned about ABC Corporation declaring bankruptcy. Potential buyers of XYZ Corporation bonds are not concerned that XYZ Corporation may declare bankruptcy. Which of the following statements is correct?
a. Other things equal, the interest rate on XYZ Corporation bonds will be high relative to the interest rate on ABC Corporation bonds. b. An ABC Corporation bond must have a longer term than an XYZ Corporation. c. XYZ Corporation bonds carry less default risk than do ABC Corporation bonds. d. All of the above are correct.
A firm can produce two products with the cost function C(Q1, Q2) = 10 + 5Q1 + 5Q2 ? 0.2Q1Q2. The firm enjoys:
A. economies of scale in the two products separately. B. economies of scale in the two products separately and cost complementarity. C. cost complementarity and economies of scope. D. economies of scope only.