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Questions › JNU › JNU SIS 2020 › Q12
0 marksMicroeconomics › Market failure, externalities and public goods › Public goods and the classification of goodsModerateabout 1 min

JNU SIS 2020 Question 12: Market failure, externalities and public goods

Suppose that 10 people live in a street and that each of them is willing to pay 2 for an extra streetlight. Let the cost of providing x streetlights be c(x)=x2c(x) = x^{2}c(x)=x2. What is the Pareto-efficient number of streetlights ?

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Suppose that 10 people live in a street and that each of them is willing to pay 2 for an extra streetlight. Let the cost of providing x streetlights be c(x) = x². What is the Pareto-efficient number of streetlights? (A) 1 (B) 10 (C) 5 (D) None of the above

Also written as: Suppose that 10 people live in a street and that each of them is willing to pay 2 for an extra streetlight. Let the cost of providing x streetlights be c(x) = x^2. What is the Pareto-efficient number of streetlights?

Market failure, externalities and public goods has come up 114 times in 7 exams since 2006.

What this question tests

This question is on Public goods and the classification of goods, part of Market failure, externalities and public goods in Microeconomics.

Goods that are non-rival and non-excludable, and the condition for providing them efficiently.

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