Suppose that Bob and Sally are only the residents of the city of Madison. They n

Question

Suppose that Bob and Sally are only the residents of the city of Madison. They need to determine the number of fire workers Madison should have. Fire workers satisfy the characteristics of a pure public good. The marginal benefit that each person receives (in dollar terms) is given by the following table.

# of

Fire workers

Marginal

benefit

for Bob

Marginal

benefit

for Sally

1

13

9

2

9

8

3

5

4

4

4

2

The marginal social benefit of the second fire worker is ______

If the wage of a fire worker is $9, the efficient number of fire workers is _______

# of

Fire workers

Marginal

benefit

for Bob

Marginal

benefit

for Sally

1

13

9

2

9

8

3

5

4

4

4

2

Explanation / Answer

the second fire worker is   17

the efficient number of fire workers is 3

The marginal social benefit of the second fire worker = Marginal benefit for Bob + Marginal benefit for Sally

= 9 + 8 = 17

Wage Should be = marginal social benefit

S0, for 3 workers , Wage = marginal social benefit , 9 = 9

So, the efficient number of fire workers is = 3

If you don't understand anything, then comment, I will revert back on the same.

And If you liked the answer then please do review the same. Thanks :)

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.