pubsec-hintsps4

pubsec-hintsps4 - result you get is only valid up to the...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
BRANDEIS UNIVERSITY Department of Economics Econ 134 Mr. Coiner Public Sector Spring, 2010 Hints for Problem Set 4 On the 2 nd question, which is #11 from Chapter 9, plot the 3 demand curves and take note of their horizontal intercepts (the quantity demanded when the price is zero). These will be 3 different numbers. To get the Social Marginal Benefit curve, add the demand curves vertically. However, the
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: result you get is only valid up to the quantity that is the smallest of the 3 horizontal intercepts. Above that quantity, one of the people no longer gets any benefit from the public good, and there would only be 2 demand curves to add. If you continue to add all 3 curves, you will be “adding” a negative benefit for Alfie, which is not correct....
View Full Document

This note was uploaded on 10/15/2011 for the course ECON 134 taught by Professor Coiner during the Spring '11 term at Brandeis.

Ask a homework question - tutors are online