1. A municipal government is considering to improve internet cabling in a neighborhood. There are two types of people living in the neighborhood. Type A individuals rarely use the internet, and so would be only willing to pay $10 for access to the improved cabling. Type B individuals are heavy users of the internet, and so would be willing to pay $50 for it. There are 100 Type A individuals and 50 Type B individuals in the neighborhood. The cost of building and maintaining the cable network is $3,000. (Both types have the same income, and income effects are negligible.)
   1. Is network cabling a public good? Explain your answer.
   2. Is it efficient for the government to improve the network cabling in this neighborhood? Explain your answer.
   3. Suppose the municipal government wanted to fund the construction and maintenance of the new cable network using Lindahl pricing. How might this work? What is the main practical difficulty with the government implementing Lindahl pricing in this type of situation?
   4. Suppose everyone in the neighborhood votes on whether to install the cabling and levy a uniform $20 tax per person to finance the project. Would the measure pass?
   5. Compare the mean and median willingness to pay for the public good in this population, and use this to explain what features of this scenario led to your answers in parts b and d.

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