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Evaluating a City Official's Argument
A city official argues against installing a new street light on a quiet residential street, stating, 'The high cost of this light is not justified because only a handful of residents will walk or drive there at night. We should only invest in projects where the benefits are shared by a large number of people.'
Critically evaluate the economic reasoning of the official's argument regarding the nature of the benefit provided by the street light. Is their justification for opposing the project sound from an economic perspective? Explain your reasoning.
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CORE Econ
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Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Related
A new street light is installed on a public road. One person's ability to see clearly while walking under the light at 9:00 PM does not reduce another person's ability to use the same light for visibility when driving past at 9:01 PM. Which of the following statements best analyzes the economic characteristic of the street light's service being demonstrated here?
City Council Street Light Debate
A city installs a new street light on a public road. To cover the cost, the city begins charging a small fee to every person who walks under it after dark. The imposition of this fee means the illumination provided by the street light is no longer a non-rival good.
The Uncongested Street Light
Evaluating a City Official's Argument
A single street light illuminates a narrow public path. Typically, one person walking down the path does not affect another's ability to see. However, during a large festival, the path becomes so crowded that the sheer number of people casts shadows and physically blocks the light, making it difficult for others to see the ground. In the context of the festival, how does this extreme congestion affect the nature of the street light's illumination?
Contrasting Consumption Characteristics
For each of the following goods, determine whether its consumption is characterized by rivalry. Match each good to the correct characteristic.
A town installs an experimental, high-intensity street light. While it illuminates the sidewalk for pedestrians, its powerful beam creates a significant glare for oncoming drivers, making it more difficult for them to see the road. In this situation, the illumination provided by the street light has become a rival good.
A municipality installs a new street light on a public sidewalk. The total cost for the lamp, post, and installation was $3,000, and the electricity to operate it costs $365 per year. On a particular evening, 50 people have already walked under the light and benefited from its illumination. What is the additional cost to society for a 51st person to walk under the light and also benefit from its illumination?