Suppose that the small town of Spectacular is planning for its Octoberfest. People seem to think fireworks would be a good idea for this event. Assume there are 50 residents in Spectacular. Assume that the social, as well as private, marginal cost of each minute of fireworks is $100 no matter how many minutes are planned. There are no fixed costs. For each resident the marginal benefit function for minutes of fireworks is given by: SMBi=10(1/10)Q, for i=1,,50 where " Q " is the number of minutes. a) If each resident had to privately buy and privately consume minutes of fireworks in a market at a price equal to market marginal cost, how many minutes would each individual resident buy for himself/herself? b) The mayor realizes that fireworks are a pure public good and he decides to make it illegal for people to buy fireworks themselves. The town will put on a display. The display will be free to the 50 residents. The town will pay for the fireworks. The mayor will determine the optimal number of he is not one of the 50 residents. However, the mas not know the marginal benefit functions of minutes of fireworks they should have, but he docs nent to obtain this information. If each ref his residents. So he sends a questionnaire to each, how many minutes of fireworks should be reports his/her true marginal benefit function, order to be Pareto efficient? c) If one savvy resident believes that all the others will reponcentive to also behave tiunctions truthfully, does that particular savvy resident have an iain/defend your assertion what do you predict this person will do? Brichl. Now suppose that the mayor d) Suppose everyone does indeed report the the must finance the fireworks display conservatives who insist that the residents must form a tax policy quickly. If you tax. The mayor is "The Decider" and must fireworks, and how would you defend the mayor, how