Use the Following to Answer Questions

question 40

Multiple Choice

Use the following to answer questions:
Figure: Market Failure
-(Figure: Market Failure) Look at the figure Market Failure. Suppose the supply curve represents the marginal cost of providing streetlights in a neighborhood that is composed of two people, Ann and Joe. The demand curve represents the marginal benefit that Ann receives from the streetlights. Suppose that Joe's marginal benefit from the streetlights is a constant amount equal to AC. How much is Ann willing to pay for E streetlights?

• A) 0
• B) A
• C) B
• D) C

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Definitions:

Confidence Interval

A span of numerical values, calculated from statistics of a sample, that is expected to encompass the value of a not yet known population parameter with a certain degree of confidence.

Sample

A subset of individuals or observations selected from a larger population for the purpose of statistical analysis.

Mean

The mean of a number set, found by dividing the total sum of the numbers by the quantity of numbers present in the set.

Confidence Interval

A selection of numerical values, from the analysis of sample stats, predicted to encapsulate the value of an unknown attribute of the population.