(Total: 20 pts) Suppose demand for a public park (assume it is a pure public good)...
(Total: 20 pts) Suppose demand for a public park (assume it is a
pure public good) for two groups of consumers (A and B) is given
by:
QA =4-0.5P
QB = 7 - P
where Q is the number of hectares each group would like to see incorporated into the park.
-
a) (10pts) If the marginal cost to provide the park is a constant $3/ha, what is the socially efficient number of
hectares for the park?
-
b) (10pts) If the land where the park might be built were private property and the owner of the land could
charge admission, what size park would the owner of the land build? Explain why the size of the park under private property will differ from when the park is a public good.
Homework Answers
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(Total: 20 pts) Suppose demand for a public park (assume it is a
pure public good)...
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perspective, Unocal did the right thing in deciding to invest in
the pipeline and then in conducting the project as it did. In your
view, and using your utilitarian, rights, justice and caring
assessments, did Unocal do the right thing?
CASE:
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