You must read each slide, and complete any questions on the slide, in sequence.
A residential community has 100 residents who are concerned about security. The accompanying table gives the total cost of hiring a 24-hour security service as well as each individual resident’s total benefit.
Quantity of security guards
Total cost
Total individual benefit to each resident
0
$0
$0
1
150
10
2
300
16
3
450
18
4
600
19
Security services are nonexcludable: as soon as security is provided to the community, every resident benefits from it. Security services are nonrival: if one resident enjoys protection, this does not diminish any other resident’s ability to enjoy the service. For further review see section, “Providing Public Goods.”
Security services are nonexcludable: as soon as security is provided to the community, every resident benefits from it. Security services are nonrival: if one resident enjoys protection, this does not diminish any other resident’s ability to enjoy the service. For further review see section, “Providing Public Goods.”
Security services are nonexcludable: as soon as security is provided to the community, every resident benefits from it. Security services are nonrival: if one resident enjoys protection, this does not diminish any other resident’s ability to enjoy the service. For further review see section, “Providing Public Goods.”
Video Player is loading.
Current Time 0:00
/
Duration 0:00
Loaded: 0%
Stream Type LIVE
Remaining Time -0:00
1x
Chapters
descriptions off, selected
captions settings, opens captions settings dialog
captions off, selected
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
End of dialog window.
This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.
This is a modal window.
Step 2
In the box below calculate the marginal cost, the individual marginal benefit for each resident, and the marginal social benefit.
Quantity of security guards
Total cost
Marginal cost
Total individual benefit to each resident
Individual marginal benefit
Marginal social benefit
0
$0
--
$0
--
--
1
150
$
10
$
$
2
300
16
3
450
18
4
600
19
The marginal cost is calculated as the change in total cost. The individual marginal benefit is calculated as the change in total individual benefit to each resident. Marginal social benefit is simply the individual marginal benefit multiplied by 100, since there are 100 residents. For further review see section, “How Much of a Public Good Should be Provided.”
The marginal cost is calculated as the change in total cost. The individual marginal benefit is calculated as the change in total individual benefit to each resident. Marginal social benefit is simply the individual marginal benefit multiplied by 100, since there are 100 residents. For further review see section, “How Much of a Public Good Should be Provided.”
In the box below calculate the marginal cost, the individual marginal benefit for each resident, and the marginal social benefit.
The marginal cost is calculated as the change in total cost. The individual marginal benefit is calculated as the change in total individual benefit to each resident. Marginal social benefit is simply the individual marginal benefit multiplied by 100, since there are 100 residents. For further review see section, “How Much of a Public Good Should be Provided.”
The marginal cost is calculated as the change in total cost. The individual marginal benefit is calculated as the change in total individual benefit to each resident. Marginal social benefit is simply the individual marginal benefit multiplied by 100, since there are 100 residents. For further review see section, “How Much of a Public Good Should be Provided.”
In the box below calculate the marginal cost, the individual marginal benefit for each resident, and the marginal social benefit.
Video Player is loading.
Current Time 0:00
/
Duration 0:00
Loaded: 0%
Stream Type LIVE
Remaining Time -0:00
1x
Chapters
descriptions off, selected
captions settings, opens captions settings dialog
captions off, selected
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
End of dialog window.
This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.
This is a modal window.
Step 3
0:39
Video Player is loading.
Current Time 0:00
/
Duration 0:00
Loaded: 0%
Stream Type LIVE
Remaining Time -0:00
1x
Chapters
descriptions off, selected
captions settings, opens captions settings dialog
captions off, selected
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
End of dialog window.
This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.
This is a modal window.
Step 4
0:58
Video Player is loading.
Current Time 0:00
/
Duration 0:00
Loaded: 0%
Stream Type LIVE
Remaining Time -0:00
1x
Chapters
descriptions off, selected
captions settings, opens captions settings dialog
captions off, selected
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
End of dialog window.
This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.