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
Economics
You might also like to view...
Define productive efficiency. Does productive efficiency imply allocative efficiency? Explain
What will be an ideal response?
Economics
If the financial innovations such as ATM machines make money demand less elastic than it was before, then
a. the LM curve will become steeper. b. the LM curve will become flatter. c. both the IS and LM curves will become flatter. d. the LM curve will shift to the left.
Economics