HW3,SP2000 - EEP101/ECON125 Spring 00 Prof.: D. Zilberman...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
EEP101/ECON125 Spring 00 Prof.: D. Zilberman GSIs: Malick/McGregor/St-Pierre PROBLEM SET 3 Due Thursday, March 16, 2000 in class (Late assignments will not be graded) Part 1: Exercises 1. (Public Goods) Suppose the Albany city council is considering replacing existing dim streetlights with bright, attractive ones on the lower end of Solano Ave (near San Pablo). Providing new lights is expected to provide such benefits as increased numbers of evening strollers and shoppers as well as deter crime. Suppose further that there are 20 businesses in the area. Half of these businesses place relatively high value on these new lights and half value these new lights to a lesser extent. Specifically, the marginal benefit functions for a business in each of the two types of business can be described by their demand function for Q, the number of installed streetlights. These are “high” value businesses: P H = 20 – Q “low” value businesses: P L = 8 – Q The marginal cost of providing streetlights is given by
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

HW3,SP2000 - EEP101/ECON125 Spring 00 Prof.: D. Zilberman...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online