Say a Public Good Is Provided to Two Consumers: John

question 5

Multiple Choice

Say a public good is provided to two consumers: John and Jill. John's willingness to pay for the good is P = 10 - Q, and Jill's is P = 20 - 2Q. The marginal cost to provide the good are 2Q. Assume the government must pay for providing this good by taxing Jill and John equally to raise the necessary revenue. When the optimal quantity of this good is provided, Jill's willingness to pay for the good is

• A)4.
• B)12.
• C)48.
• D)2.

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Definitions:

Beef Prices

The market value or cost of beef at a given time, influenced by factors like supply and demand.

Wage Increase

An upward adjustment in the salary or hourly pay rate of workers, often in response to factors like cost of living adjustments, performance evaluations, or market conditions.

Auto Workers

Employees involved in the production of automobiles, typically working in manufacturing plants or assembly lines for automotive companies.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase.