Table 11-1
Consider the town of Tritown with only three residents,Ed,Jim,and Tony.The three residents are trying to determine how large,in acres,they should build the public park.The table below shows each resident's willingness to pay for each acre of the park.

-Refer to Table 11-1.Suppose the cost to build the park is $30 per acre and that the residents have agreed to split the cost of building the park equally.If the residents decide to build a park with size equal to the number of acres that maximizes total surplus from the park,how much total surplus will Jim receive?
A) -$2
B) $2
C) $6
D) $10

Question

Table 11-1
Consider the town of Tritown with only three residents,Ed,Jim,and Tony.The three residents are trying to determine how large,in acres,they should build the public park.The table below shows each resident's willingness to pay for each acre of the park.
 
-Refer to Table 11-1.Suppose the cost to build the park is $30 per acre and that the residents have agreed to split the cost of building the park equally.If the residents decide to build a park with size equal to the number of acres that maximizes total surplus from the park,how much total surplus will Jim receive?
A) -$2 
B) $2 
C) $6 
D) $10

Quizplus · Accepted Answer

To maximize total surplus, the park should be built to the size where the marginal benefit equals the marginal cost. Assuming the table shows Jim's marginal benefit per acre, calculate the total benefit Jim receives from the optimal park size and subtract his share of the cost.

Table 11-1 Consider the Town of Tritown with Only Three Residents,Ed,Jim,and Tony.The