Welcome to the Q&A for ECN/APEC 2010, where you can ask questions and receive answers from your fellow students, the TA, and your professor.

Please only ask questions about the material for the course.

For questions and discussions about course organization or other course related topics, come see us after class or during office hours.

Feel free to discuss quiz questions on the Q&A, but do not provide direct answers to quiz questions before the quiz's due date.

You have been assigned an automatic user name which you won't be able to change.

Welcome to the Q&A for ECN/APEC 2010, where you can ask questions and receive answers from your fellow students, the TA, and your professor.

Please only ask questions about the material for the course. Try to create discussions about the material we see in class, instead of just thinking of economics in general (this is an introduction to microeconomics class, not a policy or government class).

For questions and discussions about course organization or other course related topics, come see us after class or during office hours.

Feel free to discuss quiz questions on the Q&A, but do not provide direct answers to quiz questions before the quiz's due date.

Practice Quiz 15, question 14

0 votes
26 views

Consider a village with 10 inhabitants. The cost of public lighting in the village is $70 a month. The willingness to pay of the 10 inhabitants for public lighting is described in the following table:

Suppose that, in order to fund public lighting, the village council imposes a tax of $7 on each inhabitant.

Which of the following statement is true?

the answer is:

The (total) consumer surplus of the 10 inhabitants is lower when public lighting is provided and funded through the tax, than when public lighting is not provided and no-one has to pay the tax.

can someone explain why?

asked May 1 by canvas-e415876b4fe9a (251 points)

1 Answer

+2 votes
It is lower, because there is more consumer surplus when nobody has to pay, so everyone on the graph receives surplus, whilst when the lighting is produced, only the people who are willing to pay more than the tax receive surplus.
answered May 1 by canvas-1ad866c711d22 (120 points)
...