hi I have 8 questions

1. Alfie, Bill, and Coco each value police protection differently. Alfie’s demand for the

public good is Q = 55 – 5P, Bill’s demand is Q = 80 – 4P, and Coco’s demand is Q =

100 – 10P. If the marginal cost of providing police protection is $13.5, what is the socially

optimal level of police provision? Under Lindahl pricing, what share of the tax

burden would each of the three people pay?

To answer these questions, first rewrite each demand so that P is expressed as a function of Q:

Alfie: PA = 11 – 0.2Q; Bill: PB = 20 – 0.25Q; Coco: PC = 10 – 0.1Q.

Adding each person’s willingness to pay yields PA + PB + PC = 41 – 0.55Q. The lefthand

side gives the marginal social benefit of providing the Qth unit of the good. Setting this

marginal benefit equal to the marginal cost gives the socially optimum level of provision:

41 – 0.55Q = 13.5, or Q = 50

When Q = 50, Alfie’s marginal benefit is 11 – 0.2(50) = 1. Similarly, Bill’s marginal

benefit is 20 – 0.25(50) = 7.5, and Coco’s is 10 – 0.1(50) = 5. Hence, Alfie’s share of the tax burden under Lindahl pricing is 1/13.5 7.4%, and Bill and Coco’s shares are approximately 55.6% and 37%, respectively.

2. Alfie, Bill, and Coco each value police protection differently. Alfie’s demand for the public good is QDA = 55 − 5P, Bill’s demand is QDB = 80 − 4P, and Coco’s demand is QDC = 100 − 10P . If the marginal cost of providing police protection is $13.50, what is the socially optimal level of police provision? Under Lindahl pricing, what share of the tax burden would each of the three people pay?

To answer these questions, first rewrite each demand so that P (willingness to pay) is expressed as a function of Q:

Alfie: PA = 11 − 0.2Q; Bill: PB = 20 − 0.25Q; Coco: PC = 10 − 0.1Q. Adding each person’s willingness to pay yields PA + PB + PC = 41 − 0.55Q. The left-hand side gives the marginal social benefit of providing the Qth unit of the good. Setting this marginal benefit equal to the marginal cost gives the socially optimum level of provision:

41 − 0.55Q = 13.50,

or Q◦ = 50.

When Q = 50, Alfie’s marginal benefit is 11 − 0.2(50) = 1, Bill’s marginal benefit is 20 − 0.25(50) = 7.5, and Coco’s is 10 − 0.1(50) = 5. Hence, Alfie’s share of the tax burden under Lindahl pricing is 1/13.5 ≈ 7.4%, Bill’s share is 7.5/13.5 ≈ 55.6% and Coco’s share is 5/13.5 ≈ 37%.

3. Consider the following utility changes that will result from the passage of two legislative bills on issues X and Y:

1. Identify the logrolling opportunity present in this situation.

2. Identify the utility gains to voters.

3. Explain why logrolling is efficiency enhancing.

Answers:

1. A and B can exchange votes for Y and X, respectively, in order to have X and

Y pass.

1. A has a net utility gain of 3, consisting of +6 from X and -3 from Y. B also

has a net gain of 3, consisting of -1 from X and +4 from Y. C loses 5,

composed of -2 from X and -3 from Y.

1. There is an overall gain in welfare of 1. The total gain to A and B is 6,

offsetting by 1 the loss of 5 to C.

question number 4 no similar

Question 5

Answer

6. The most popular state park in the Craggy Mountains recently reached the point where a common property resources problem arose  too many people hunted for wild boar each season. The boar population became over hunted and was in peril of extinction. An economist at the local university studied the problem for the park management and estimated the following cost and revenue relationships: Demand: P = 10-0.008Q Marginal social cost: MSC = 1.00 + 0.0067Q Marginal private cost: MPC = 1.00 + 0.0010Q. The variable Q represents the number of boars killed each season and price P is in hundreds ($).

a. Determine the equilibrium number of boars killed per season, when there is unlimited access to the park.

b. Determine the per boar fee that must be charged to reduce the harvest to the efficient level.

Can’t find all the answer..

Couldn’t find question 7

Suppose that the residents of a small community are voting for a fourth of july fireworks