Two towns, each with three members, are deciding whether to put on a fireworks display to celebrate the New Year. Fireworks cost $300. In each town, some people enjoy fireworks more than others.In the town of Bayport, each of the residents values the public good as follows:

Resident Value
(Dollars)
Darnell 70
Eleanor 90
Jacques 150
The total benefit of the fireworks display to the town of Bayport is ($ ).

Therefore, fireworks (would/would not) pass the cost-benefit analysis in the town of Bayport.

The mayor of Bayport proposes to decide by majority rule and, if the fireworks referendum passes, to split the cost equally among all residents.

Who would vote in favor of the fireworks referendum? Check all that apply.

Darnell

Eleanor

Jacques

Answers

Answer 1
Answer:

Answer:

Thus, option b and c are correct.

Explanation:

Suppose that there are two towns. Each town has three members to put on a fireworks display. The cost of fireworks is $300.

Find the total benefits of the fireworks display to the town of B.

Total benefit = value to Darnell + value to eleanor + value to Jacques

= 70+90+150 =$310

Thus, total benefit of the fireworks display to the town of B is $310.

Since the total benefits to the persons is greater than the total costs, therefore, fireworks would pass the cost- benefits analysis in the town of B.

The mayor of B said to spilt the cost among all the residents. Each of the residents will bear s $100 ($300/3).

Darnell and Eleanor will not vote for this because cost to them is more than the value to them. Remaining Jacques

will vote for this because cost to him is less than the value to him for this.

Thus, Jacques will vote in favor of this.

Thus, option c is correct.

Therefore, vote would not yield the same answer as the cost-benefit analysis.

Find the total benefits of the fireworks display to the town of RH.

Total benefit = value to kyoko + value to Musashi + value to Rina

= 50 +110+ 120 = $280

Thus, total benefit of the fireworks display to the town of RH is $280.

Since the total benefits to the persons is less than the total costs, therefore, fireworks would not pass the cost- benefits analysis in the town of RH.

The mayor of RH said to spilt the cost among all the residents. Each of the residents will bear $100 &$300/3).

Kyoko will not vote for this because cost to them is more than the value to them. Remaining Musashi and Rina will vote for this because cost to him is less than the value to him for this.Thus, Musashi and Rina will vote in favor of this.

Thus, option b and c are correct.

Therefore, vote would not yield the same answer as the cost-benefit analysis.

The following statements are correct about the provision of public goods.

It is hard for the government to decide the appropriate amount of public goods to produce because people have differing preferences regarding such goods. Thus, option b is correct.


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What is the consequence of a firm in a competitive market selling a homogenous product?a. The firms capture some market power.
b. The product sold by one firm is a perfect substitute for the products sold by other firms in the same industry.
c. All the firms in the industry are the same size.
d. The product sold by one firm is a perfect complement for the products sold by other firms in the industry.
e. Firms in the industry can produce the same product with a different quantity of inputs.

Answers

Answer:

The correct answer is letter "B": The product sold by one firm is a perfect substitute for the products sold by other firms in the same industry.

Explanation:

Homogeneous products are those that cannot be differentiated one from another because they have similar features and satisfy the same need. They could even be sold at the same or nearly the same price. Under this scenario, these products are perfect substitutes from one another. Consumers will not be affected if one of the manufacturers decides to stop operations.

11) Individual Web pages or clusters of pages that function as supplements to a primary site are ________. A) search engine optimization B) pay-per-click ads C) delighters D) microsites E) touch points

Answers

Individual Web pages or clusters of pages that function as supplements to a primary site are  microsites.

What is a microsite?

  • Microsites are brand-specific websites (or a single web page) that businesses use to advertise their particular goods, occasions, or campaigns. These have a different URL than their corporate websites and are hosted on their own domain or a subdomain of the company.
  • A microsite is a branded content website, sometimes known as a "content centre," that is independent of your brand's URL and/or company website.
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To learn more about Microsites refer,

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The product-variety externality is associated with the A. consumer surplus that is generated from the introduction of a new product. B. loss of consumer surplus from exposure to additional advertising. C. producer surplus that accrues to incumbent firms in a monopolistically competitive industry. D. opportunity cost of firms exiting a monopolistically competitive industry.

Answers

Answer:

A. consumer surplus that is generated from the introduction of a new product.

Explanation:

The product-variety externality is defined as consumer get the surplus that is generated from the introduction of a new product and entry of a new firm conveys a positive externality on consumers. It arises as new firms offer products that differ from those of the existing firms, however, it does not happen under perfect competition. Competitive market lead to efficient outcomes, unless there are externalities.

Sako Company’s Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow: Selling price per unit on the intermediate market $ 47
Variable costs per unit $ 17
Fixed costs per unit (based on capacity) $ 8
Capacity in units 56,000

Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will need 9,000 speakers per year. It has received a quote of $35 per speaker from another manufacturer. Sako Company evaluates division managers on the basis of divisional profits.Assume that the Audio Division is now selling only 49,000 speakers per year to outside customers. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division?

Answers

Answer:

The lower acceptable transfer price by Audio Division is variable cost of producing the extra unit which is $17.  Producing to capacity will have no effect on the fixed cost because it will not change regardless on increase in production.

Explanation:

Answer:

.

Explanation:

The lowest acceptable movement price by Audio Division is shifting cost of making the more parts which are 17 dollars. making to capacity will have no effect on the fixed cost because it will not change regardless on increase in production.

The numerator of the return on common stockholders' equity is_____________. a.income before income tax b.operating income minus interest expense c.net income d.net income minus preferred dividends

Answers

The numerator of the return on common stockholders' equity is net income minus preferred dividends.

Option d

Explanation:

Return on common stockholders' equity which is also named as return on equity (ROE) ratio evaluates the accomplishment of a company in resulting income for the benefit of common stakeholders.

Use of return on equity:

  • Isolates common equity returns
  • Can be used to evaluate dividends
  • Evaluates the use of capital by the management

It is calculated by income available for stockholders divided by the total number of common stock and is expressed or represented in percentage. Income available for common stockholders can be arrived by reducing preference dividends from Net income.

That is, \text { Net income }-\text { Preference dividends }=\text { Equity available for common stockholder }

Hence, net income minus preferred dividends is the right answer.

Your best friend wants to borrow $2000 from you today for an emergency purchase they need to make that requires a cash payment. They promise to pay you back $1000 in 1 year (i.e. 12 months) and then pay you $1100 in two years (i.e. in 24 months). You would have to remove the money from your stock investment account which is earning on average a return of 5% (i.e. the effective yearly interest rate you are getting on your money is 0.05). Required:
a. Is this a fair deal for you? Justify your answer with an engineering economics analysis and discussion of the situation by calculating the Net Present Value (NPV) for the scenario.
b. Draw a Cash Flow Diagram for this situation.

Answers

Answer:

a. It is not a fair deal for me.

The question is how much is $1,000 today when received in 12 months' time from now.  The present value of $1,000 at 5% effective interest rate is $952 ($1,000 * 0.952).  The other repayment of $1,100 in 2 years' time from now is worth $997.70 today at the 5% effective interest rate.  This implies that my friend is repaying me $1,949.70 in present value terms.

For friendship sake, I may lend her the money, but in economic analysis terms, the NPV value will yield a negative value of $50.30 ($2,000 - $1,949.70).  My friend is not actually paying me back the amount I would lend to her.  She is paying me less than I actually would lend to her.

b. Cash Flow Diagram:

                 Year 1             Year 2

                    F1                F2

                 $1,000          $1,100     (Inflows)

Fo⇵.................⇵.......................⇵...........................⇵n period

Year 0

$2,000   (outflows)

Explanation:

The cash flow diagram for this loan is the graphical representation of the timing of the cash flows with a clear marking of the repayments made by my best friend in two instalments and the $2,000 that I lent to her.  This cash flow diagram presents the flow of cash as arrows on a timeline scaled to the magnitude of the cash flow, where outflows are down arrows and inflows are up arrows.

The Net present value (NPV) of this loan shows the difference between the present value of repayments by my best friend and the present value of $2,000 that I lent to her over a period of 2 years. To obtain this difference, the present values of cash inflows  of $1,000 in a year's time and $1,100 in two years' time are determined using the discount factor table based on the given interest rate of 5%.

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