Question Due in the lab no later than Tuesday, April 30, 2013. T

03 Jun Question Due in the lab no later than Tuesday, April 30, 2013. T

Question
Due in the lab no later than Tuesday, April 30, 2013. The early submission deadline is Friday, April 26. Early submissions will receive 2 extra credit points. Late Homework will not be accepted under any circumstances. Answers must be submitted on a General Purpose NCS Answer Sheet No. 229633 available in the ASU Bookstore. The Answer Sheet must be completed in pencil and contain your name and 10 digit ASU IdentificationNumber.
Price per foot in height

Height in feet demanded

Manny’s demand

Moe’s demand

Jack’s demand

$0

5 feet

4 feet

3 feet

$5

4 feet

3 feet

2 feet

$10

3 feet

2 feet

1 foot

$15

2 feet

1 foot

0 feet

$20

1 foot

0 feet

0 feet

1. Manny, Moe and Jack constitute the market for a retaining wall which is considered to be a public good. The price per foot in height of the retaining wall and their demand for the retaining wall is described in the table above. If the cost to supply the public good is $30 per foot, what is the efficient height of the retaining wall assuming that it is a public good?

A) Since the government will pay for the public good, 12 feet is optimal because that is what is demanded at a price of zero to Manny, Moe and Jack.

B) Zero because no one is willing and able to pay $30.

C) One foot in height.

D) Two feet in height.

E) Three feet in height.

2. Manny, Moe and Jack constitute the market for a retaining wall which is considered to be a private good. The price per foot in height of the retaining wall and their demand for the retaining wall is described in the table above. If the price of the wall is $10 per foot, what is the efficient height of the retaining wall assuming that the retaining wall is a private good?

A) 9 feet

B) 3 feet

C) 5 feet

D) 12 feet

E) 6 feet

3. We hear so much about the depletion of the ozone, the destruction of the rain forest, the pollution of the oceans and rivers, and the depletion of wildlife because

a. private individuals and businesses lack the time to take full account of these issues.

b. private individuals and businesses don’t care about our environment.

c. scientists are looking to make names for themselves and thereby gain a lot of publicity.

d. the media focuses on negative stories.

e. private individuals and businesses lack incentives to take full account of the consequences of their actions.

4. An externality exists when

a. some of the costs of producing a product affect people unable, within a market system, to influence how much of a product should be produced.

b. only the buyers and sellers are affected by the production of a product or service.

c. every person in a market system has a chance to influence how much of a product should be produce