Suppose residents of Toadhop live on the Quabache River, a river prone to flooding. Suppose there are 1000 (type A) people who value flood control more than the 1000 (type B) people. Type A Demand QD = 100 ? P Type B Demand QD = 50 ? P Where Q measures the quality of flood control. If the price of a unit of flood control is $100,000 and the citizens of Toadhop gather for a townhall meeting to
find the socially optimal level of flood control, and they are successful, how much will each type B individual contribute in total?
a. 1875
b. 1500
c. 875
d. 625
d
You might also like to view...
Suppose the Fed conducts an open market sale of bonds. This monetary policy action will tend to cause
A) the price of bonds to increase and the interest rate to increase. B) the price of bonds to increase and the interest rate to decrease. C) the price of bonds to decrease and the interest rate to increase. D) the price of bonds to decrease and the interest rate to decrease.
The 1910–1914 period was chosen as a benchmark period for determining parity prices because that was when
a. there was the greatest number of farms b. corn prices were the highest c. farmers believed that farm and nonfarm prices were such that farms goods tradedequal value for equal value with nonfarm goods d. the exchange standard was most biased in favor of farmers e. farm productivity was the lowest