Alex, Kara, and Susie are the only three people in a community. Alex is willing to pay $40 for the third unit of a public good; Kara is willing to pay $25. If the marginal cost of producing the third unit is $100, what is the minimum amount that Susie must be willing to pay for it to be efficient for government to produce the third unit?
What will be an ideal response?
$35
You might also like to view...
If there are equal rates of return between assets in two currencies, then there is
A) purchasing power parity. B) interest rate parity. C) parity of exchange. D) foreign exchange parity.
If float is predicted to decrease because of good weather, the manager of the trading desk at the New York Fed bank will likely conduct ________ open market operations to ________ reserves
A) defensive; inject B) defensive; drain C) dynamic; inject D) dynamic; drain
All of these factors create economies of scale, except
a. Specialization and Division of Labor b. Technological Factors c. Increase in advertisement costs d. Quantity discounts
The amount of a product that people are willing and able to purchase at a specific price is referred to as the:
a. demand. b. quantity demanded. c. law of demand. d. consumption function. e. purchasing power.