a2even_Fall2008

a2even_Fall2008 - CARLETON UNIVERSITY Department of...

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Department of Economics ECON 1000A TUTORIAL ASSIGNMENT 2 GROUPS 2,4,6,8,10 INSTRUCTOR: D. Smith Fall 2008 1. All of the sections of this question are based on the following table. Guards Total cost per day ($) Marginal benefit per resident Marginal benefit to all residents 1 300 10 2 600 4 3 900 2 4 1200 1 Carleton Apartments has 100 residents who are concerned about security. The table gives the total cost of hiring security guards and also shows the marginal benefit of different levels of security to each of the residents. (a) Why is a security guard a public good for these residents? (b) How many guards will be hired if each resident acts individually? Why? (c) In column (4), what are the missing values of marginal benefits to all residents? (d) If the residents form an Apartment Council to deal with security, what is the optimal number of guards from this overall perspective? What is the net benefit at the optimal number of
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a2even_Fall2008 - CARLETON UNIVERSITY Department of...

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