This topic contains a solution. Click here to go to the answer

Author Question: Why do school districts sell bonds to the public when they are financing a new school building ... (Read 97 times)

go.lag

  • Hero Member
  • *****
  • Posts: 667
Why do school districts sell bonds to the public when they are financing a new school building program rather than sell stock?
 
  What will be an ideal response?

Question 2

Use Figure 16.2 above to answer the following question. Assume that MPC represents the marginal private cost and MB is the marginal private benefit for a particular firm.
 
  Assume however, that the MDC represents the marginal damage cost of this firm's activity and the MSC is the marginal social cost. How much output would the firm produce if it had to internalize the negative externality.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

sailorcrescent

  • Sr. Member
  • ****
  • Posts: 334
Answer to Question 1

School districts sell bonds for these types of expenditures because the assets will have a long life and the bond can be paid back over time. They don't sell stock because school districts are typically not corporate entities but rather run by the government. Selling stock would imply that the holders of the stock have ownership in the company and a claim on its profits. Since school districts are not companies and don't make profits it is more appropriate to sell bonds to finance these expenditures.

Answer to Question 2

The firm will produce 5 units since it would now recognize the MSC curve as being its own marginal private cost curve.




go.lag

  • Member
  • Posts: 667
Reply 2 on: Jun 29, 2018
Thanks for the timely response, appreciate it


billybob123

  • Member
  • Posts: 336
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

Did you know?

Medication errors are three times higher among children and infants than with adults.

Did you know?

In inpatient settings, adverse drug events account for an estimated one in three of all hospital adverse events. They affect approximately 2 million hospital stays every year, and prolong hospital stays by between one and five days.

Did you know?

The Centers for Disease Control and Prevention (CDC) was originally known as the Communicable Disease Center, which was formed to fight malaria. It was originally headquartered in Atlanta, Georgia, since the Southern states faced the worst threat from malaria.

Did you know?

Your heart beats over 36 million times a year.

Did you know?

Between 1999 and 2012, American adults with high total cholesterol decreased from 18.3% to 12.9%

For a complete list of videos, visit our video library