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Say there were 500 families living alongside a river which was polluted. The capital and operating expenditure cost for a river improvement program was USD100,000

Say there were 500 families living alongside a river which was polluted. The capital and operating expenditure cost for a river improvement program was USD100,000 per year. Explain how the concept of Marginal Values of public good can be employed to ensure the program is desirable. Discuss the theoretical basis for estimating the Marginal Value of such good and illustrate how you would estimate it empirically. Is 'free ridership' a problem here? How can it be resolved?

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