Question
A condominium community has landscaping that can be considered a pure public good. Gardeners can be hired to maintain the landscaping at a rate of
A condominium community has landscaping that can be considered a pure public good. Gardeners can be hired to maintain the landscaping at a rate of $350 per week. The community consists of five residents, with the marginal benefirt for each gardener given in the table below.
Number of Gardener | ||||
1 | 2 | 3 | 4 | |
Mike | 375 | 275 | 225 | 175 |
Jan | 225 | 150 | 75 | 0 |
Franklin | 100 | 75 | 25 | 0 |
Susan | 75 | 50 | 25 | 0 |
Megan | 50 | 25 | 0 | 0 |
a. How many gardeners would be hired if gardeners had to be hired by individual residents?
b. What is the socially efficient number of gardeners?
c. If each resident were assigned a tax share of $70, how many gardeners would be hired under majority rule?
d. If each resident were assigned a tax share of $70, how many gardeners would be hired under unanimous consent?
e. What would be the tax shares for each resident under Lindahl pricing?
f. How many gardeners would be hired under the Lindahl pricing tax shares?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started