There are twenty homes on King Road. The installation of a streetlight would increase the value...

There are twenty homes on King Road. The installation of a streetlight would increase the value of each by $10. The streetlight costs $100 to install. Is the street light a public good? Why or why not? Should it be installed? Why? Who is more likely to install it the government or the property owners? Why? Would your answer be different if one person owned all the houses?

Expert Solution

It is a public good because it it is non rival in consumption in the sense that others cannot be prevented from its consumption when one person is consuming it and it is also non excludable because you cannot exclude one house from not receiving the light from street light

It should be installed because the benefit is $10*20 = $200 and marginal cost is $100 which is less than the valuation by homes

It is more likely to be installed by the government because property owners suffer from free riding problem and they believe that others will pay. Because the government has the ability to provide funds and property owners individually attempt to free ride, it will not be provided by property owners

Definitely the answer is different when one person has ownership over all the houses because then there is no possibility of free ride. In that case the property owner will himself be responsible for all the cost incurred and in that scenario, after conducting the benefit in cost analysis the property owner might install the streetlight himself.

Rahul Sunny answered 2 years ago

Homes in a certain town have a mean value of $88,950. It is assumed that homes...

Homes in a certain town have a mean value of $88,950. It is assumed that homes in the vicinity of the school have a higher value. A sample of 12 homes near the school is selected and it appears as if the population is normal. Their mean value is $92,460 with a standard deviation of $5200. Can we prove with 95% certainty that homes near the school do indeed have a higher value?

. In the last month, Cash Is King, Inc. had net income of $10,000, an increase...

. In the last month, Cash Is King, Inc. had net income of $10,000, an increase in a/r of $5,000, a decrease in a/p of $5,000, their inventories rose by $7500, they purchased computers worth $10,000, sold stock worth $100,000, and paid down their bank loans by $50,000. What was their cash flow from each of the following areas: a. Operations b. Investing Activities c. Financing Activities d. What was their total cash flow for the period?

Road Warrior Corporation began operations early in the current year, building luxury motor homes. During the...

Road Warrior Corporation began operations early in the current year, building luxury motor homes. During the year, the company started and completed 50 motor homes at a cost of $60,000 per unit. Of these, 48 were sold for $100,000 each and two remain in finished goods inventory. In addition, the company had six partially completed units in its factory at year-end. Total costs for the year (summarized alphabetically) were as follows. Direct materials used $ 754,000 Direct labor 803,000 Income...

Does your risk of an infection increase in nursing homes? If so what are the most...

Does your risk of an infection increase in nursing homes? If so what are the most common types of infections

The city of Wenatchee employs people to assess the value of homes for the purpose of...

The city of Wenatchee employs people to assess the value of homes for the purpose of establishing real estate tax. The city manager sends each assessor to the same 5 homes and then compares the results. The information is given below, in thousands of dollars. Can we conclude that there is a difference in the assessors, at Alpha= .05 Assessor Home Livingston Wilson Eilers Phelps A $51 $55 $49 $45 B $50 $45 $52 $53 C $53 $54 $47 $55...

• The required equipment would cost $160,000, plus an additional $35,000 for shipping and installation. •...

• The required equipment would cost $160,000, plus an additional $35,000 for shipping and installation. • In addition, inventories would rise by $26,000, while accounts payable would go up by $6,000. All of these costs would be incurred at Year 0. (In other words, increase net working capital is $25,000) • By a special ruling, the machinery could be depreciated under the MACRS system as 3-year property. Year 1 : 33%, Year 2: 45%, Year 3: 15%, Year 4: 7%...

As interest rate volatility decreases, which of the following bond value would increase: a callable bond,...

As interest rate volatility decreases, which of the following bond value would increase: a callable bond, a putable bond, a convertible bond, and an exchangeable bond? List all correct answer(s).

1) Which of the following things would increase the value of Total Factor Productivity (TFP)? Select...

1) Which of the following things would increase the value of Total Factor Productivity (TFP)? Select one: a. A new production method that can produce smaller, more efficient microchips. b. None of the other answers. c. A company hires a large amount of workers after building a brand new factory. d. Foreign investors invest in physical capital. 2) The country of Rupertopia has one factory for all its workers in 2011 and 2012. There were 100 workers in 2011 and...

2. Discuss what would happen to a future value if you increase the rate “r.” Also,...

2. Discuss what would happen to a future value if you increase the rate “r.” Also, what will happen to the present values? Suppose you deposit a large sum in an account that earns a low interest rate and simultaneously deposit a small sum in an account with a high interest rate. Which account will have the larger future value?

The city of Tucson, Arizona, employs people to assess the value of homes for the purpose...

The city of Tucson, Arizona, employs people to assess the value of homes for the purpose of establishing real estate tax. The city manager sends each assessor to the same five homes and ten compares the results. The information is given below, in thousands of dollars. Can we conclude that there is a difference in the assessors, at a significance level of 0.05? Home Smith Norman Thomas Holiday A 53 55 49 45 B 50 51 52 53 C 48...

Question