An economist has estimated that the maintenance of a public park costs $25,000 a year and that the public park generates $30,000 a year in revenue for merchants near the park. From society's point of view, the maintenance of this park is
A. inefficient because the additional revenues generated by the park are so low.
B. potentially efficient because no one would be made worse off as a result of maintaining the park.
C. potentially efficient because the value of the gains exceed the value of the costs.
D. inefficient because everyone in the community pays taxes to support the park, but only the merchants near the park benefit.
Answer: C
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Answer the following statement(s) true (T) or false (F)
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2. In the single-polluter case, a firm faced with an emission charge for pollution implemented as a marginal tax (MT) will abate as long as MAC
George Washington’s troops at Valley Forge were almost destroyed by price controls.
Answer the following statement true (T) or false (F)
The Trade Adjustment Assistance program is intended to help
a. businesses that seek to expand exports into protected foreign markets. b. local governments that are harmed when businesses fail as imports increase. c. protected industries obtain improved technology in order to increase productivity. d. workers and businesses that lose markets because of increases in imports.
Assume that the central bank sells government securities in the open market. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and monetary base in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. The real risk-free interest rate rises and monetary base rises. b. The real risk-free interest rate falls and monetary base falls. c. The real risk-free interest rate rises and monetary base falls. d. The real risk-free interest rate and monetary base remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.