Background readings: Chapter 10: Externalities; Chapter 11: Public goods and common resources

In the city of Winnipeg, consider the following event: a large conference(with attendance numbers typically in the hundreds or thousands), focused on a central theme or industry that is held over multiple days throughout the year. Activities for this event type include speakers, exhibitions, contests, and networking opportunities as well as more recreational get-togethers pre- and post-conference.To participate inthis conference, participants need to buy tickets.

The impacts of this above event on the surrounding community are:

• The conference attracts a lot of traffic, and this extra traffic, negatively affects the community (e.g., traffic congestion, long traffic jams, accidents, increased pollution); the cost to the community from the extra traffic is estimated at $20 per ticket;
• Because of this increased in traffic above, there is also a positive effect on the community (e.g., because of more educated citizens, more police patrol in the surrounding area where the conference is held - which increases safety of the surrounding neighborhoods and streets -); the estimated benefit to the community from this positive effect is $15 per ticket.

• Provide a Graph the market for this conference tickets for the case presented above and show the market equilibrium, the efficient (e.g., social optimum equilibrium) and the per unit amount of both the above estimated $20/ticket cost and $15/ticket benefit. What policies the government can implement to achieve the social optimum outcome?

Explain thoroughly with words

• For the case above, explain (with words only) into which category (consider all cases and possibilities) each of the following good falls:
  • Winnipeg city streets
  • Winnipeg police protection