8) There are 20 residents in the village of Towneburg. The size of the village’s
ID: 2441641 • Letter: 8
Question
8) There are 20 residents in the village of Towneburg. The size of the village’s annual fireworks display depends upon the number of shells that are fired off. Each resident’s demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell.
What is the horizontal intercept of the village's demand curve for fireworks?
25
50
100
500
9) Suppose that the marginal cost of providing public television to one more viewer is zero. If a public television station sets the price of public television equal to its marginal cost, then:
the station will have an incentive to provide the optimal level of programming.
the station’s total revenue will be zero.
the station’s total revenue will be positive when there are only a few viewers, but will decline as more viewers tune in.
the television station will earn zero economic profit.
10) Pork barrel programs are government programs that:
benefit agriculture.
increase total economic surplus but lack political support.
benefit industry.
benefit local areas but are of questionable value from a national perspective.
Explanation / Answer
8. (a) 25
9. (c) the station’s total revenue will be positive when there are only a few viewers, but will decline as more viewers tune in.
As more and more viewers tune in, the marginal cost of adding one more viewer cannot remain zero, thus, the total revenue will be positive when there are only few viewers and wil decrease as more viewers tune in.
10. (d) benefit local areas but are of questionable value from a national perspective.
Uner pork barrel, The money that people pay in federal taxes goes towards one specific thing in one specific state so they fell like it's not benefiting them and they are the ones paying for funds for these projects in other states. Thus, this program benefits the local areas and not the entire nation.
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