Miguel, Maria, and Marcos all would like a place to sit while waiting at their children's bus stop. The neighborhood association is considering installing several park benches at the bus stop. Miguel values the benches at $20, Maria at $30, and Marcos at $40 . The park benches and labor for installation cost $100 . If Miguel, Maria, and Marcos are the only residents who value the benches, what
should the neighborhood association do?
a. Install the park benches because people like places to sit.
b. Install the park benches because the benefits outweigh the costs.
c. Do not install the park benches because the costs outweigh the benefits.
d. Do not install the park benches to prevent the Tragedy of the Commons problem of overuse.
c
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The per-worker production function in the Solow model assumes
A) constant returns to scale and increasing marginal productivity of capital. B) constant returns to scale and diminishing marginal productivity of capital. C) increasing returns to scale and diminishing marginal productivity of capital. D) decreasing returns to scale and diminishing marginal productivity of capital.
The origins of modern monetarism lie in the work of the
A) Classical economists. B) Keynesians. C) Malthusians. D) Mercantilists.
Here is a consumption function: C = C0 + MPC(Yd). Which of the following is true about the consumption function?
A) Consumption will rise if autonomous consumption or disposable income rise. B) Consumption will fall if autonomous consumption falls or if the MPC rises. C) Consumption will rise if autonomous consumption rises, MPC declines, or disposable income rises. D) For every $1 rise in autonomous consumption, consumption will also rise by $1. E) a and d
A monopsonistic employer in an unorganized (nonunion) labor market will:
A. pay a wage rate less than labor's MRP. B. pay the same wage rate but hire fewer workers than if the market was purely competitive. C. hire the number of workers indicated by the intersection of the MRC and the labor supply curves. D. pay a wage rate in excess of labor's MRP.