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i need help to understand from question 1 to 8 The town of Chefsmeadow has 100 residents. Each resident has a car which creates $30
i need help to understand from question 1 to 8 The town of Chefsmeadow has 100 residents. Each resident has a car which creates $30 air pollution damage to each individual resident of the town, so each car creates $3,000 total pollution during the year. A car that has the "Polluteaway" anti-pollution device installed in it only produces half the pollution of a normal car. The Pollutaway costs $1,000 to buy and install. 1. If every car owner bought a Polluteaway, what would be the drop in pollution damage suffered by each individual resident. This number is the total benefit to an individual of the town if everybody was given a Polluteaway for free 1500 2. In dollar terms, how much would each individual gain or lose from everyone (including -50 themselves) buying a Polluteaway (use a negative sign to indicate a loss)? 3. Would each resident be better or worse off if everyone bought a Polluteaway? bebe For questions 4 and 5, assume everyone else in town buys one, and their decision is not affected by whether Fred buys one or not. 4. If everyone else in the town bought one, would Fred buy one? no -97 5. How much would Fred gain or lose by buying one (negative indicates a loss)? 6. Now assume no one else in town buys one. Would Fred buy one? Continued on back 7. There is a proposed deal that everyone in the town agree to buy one if everyone else agrees to also. Everyone has agreed to this deal so far except Fred. Should Fred join the deal?___ How much would he gain or lose? 8. If Fred joined the deal above, and no one could check if he actually bought and installed the device, should he actually buy it and why? 9. The government makes everyone pay a tax equal to the total pollution harm caused by their car. Should Fred install a Polluteaway? Yes 10. How much would he gain or lose by buying one and paying the tax compared to not buying one and paying the tax (negative sign indicates a loss)? The town of Chefsmeadow has 100 residents. Each resident has a car which creates $30 air pollution damage to each individual resident of the town, so each car creates $3,000 total pollution during the year. A car that has the "Polluteaway" anti-pollution device installed in it only produces half the pollution of a normal car. The Pollutaway costs $1,000 to buy and install. 1. If every car owner bought a Polluteaway, what would be the drop in pollution damage suffered by each individual resident. This number is the total benefit to an individual of the town if everybody was given a Polluteaway for free 1500 2. In dollar terms, how much would each individual gain or lose from everyone (including -50 themselves) buying a Polluteaway (use a negative sign to indicate a loss)? 3. Would each resident be better or worse off if everyone bought a Polluteaway? bebe For questions 4 and 5, assume everyone else in town buys one, and their decision is not affected by whether Fred buys one or not. 4. If everyone else in the town bought one, would Fred buy one? no -97 5. How much would Fred gain or lose by buying one (negative indicates a loss)? 6. Now assume no one else in town buys one. Would Fred buy one? Continued on back 7. There is a proposed deal that everyone in the town agree to buy one if everyone else agrees to also. Everyone has agreed to this deal so far except Fred. Should Fred join the deal?___ How much would he gain or lose? 8. If Fred joined the deal above, and no one could check if he actually bought and installed the device, should he actually buy it and why? 9. The government makes everyone pay a tax equal to the total pollution harm caused by their car. Should Fred install a Polluteaway? Yes 10. How much would he gain or lose by buying one and paying the tax compared to not buying one and paying the tax (negative sign indicates a loss)
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