Asked by Ntswaki Mereki on Jun 12, 2024
Verified
The city of Econoville has 100 residents who each have the identical demand function for park area: 
The marginal cost of providing parks is 
Park area is a public good. That is, if the city of Econoville provides park area, all of the residents can enjoy the area. If the city of Econoville does not offer public park area, how much area of parks will each individual resident maintain on their own? What is the optimal level of public parks in Econoville?
Public Good
A product or service that is non-excludable and non-rivalrous, meaning its use by one individual does not reduce availability to others, and people cannot be effectively excluded from using the good.
Optimal Level
The most favorable or desirable point or state for achieving the best outcome or maximum effectiveness.
- Characterize the differences between public goods and common property resources, including an analysis of their features and the challenges in provision.
- Engage with economic theory’s principles to assess the impact of public goods on societal health, addressing the concerns of free-riding.
Verified Answer
RF
Renee FromwillerJun 15, 2024
Final Answer :
If the city does not provide park area, each resident will set their individual marginal benefit equal to the marginal cost of providing park area. This is: 
That is, people do not enjoy park area enough to maintain their own park. However, since park area is a public good and all individuals can enjoy park area (nonexcludability in consumption), the cities aggregate marginal benefit for park area is: 
Each resident is willing to contribute $1 for each unit of park area.
That is, people do not enjoy park area enough to maintain their own park. However, since park area is a public good and all individuals can enjoy park area (nonexcludability in consumption), the cities aggregate marginal benefit for park area is: Each resident is willing to contribute $1 for each unit of park area.
Learning Objectives
- Characterize the differences between public goods and common property resources, including an analysis of their features and the challenges in provision.
- Engage with economic theory’s principles to assess the impact of public goods on societal health, addressing the concerns of free-riding.