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problem set 6

# problem set 6 - Problem Set 6 Discussion Sections Economics...

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Problem Set 6 Discussion Sections Economics 200 We will review these problems in discussion sections beginning Wednesday, October 20. 1. A three-person city is considering a fireworks display. Bertha is willing to pay \$100 to see the fireworks, Marian is willing to pay \$30, and Sam is willing to pay \$30. The cost of the fireworks is \$120. (a) In terms of efficiency, should the fireworks display be offered? Yes Social value-so. cost=160-120>>efficient (b) Will any single citizen provide the display on his or her own? (c) Suppose the town decides to put the matter to a vote. If at least two people vote in favor of the fireworks display, each person will be taxed \$40 and the fireworks display will be held. How many people will vote in favor of the display? One, Y N N >>vote is not a solution 2. All University of Maryland students have free access to the Internet. The private and social value of downloading a file is \$17. (a) When many people use the Internet at the same time the time to download files increases. Explain why this implies that the Internet is a common resource.

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problem set 6 - Problem Set 6 Discussion Sections Economics...

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