In an effort to maintain privacy and enhance property values, three home owners, Deidre, Eugene and Farhad, are considering leasing a portion of adjoining vacant land for a private park. Table 5-1 shows each person's willingness to pay for each quantity of the land.

a. Complete the column in Table 5-1

b. Graph the marginal social benefit curve.

c. Suppose the landowner is willing to lease a portion of her land according to the following supply schedule given in Table 5-2. On the same diagram, graph the supply curve.

d. What is the optimal quantity of land that homeowners should lease? Explain your answer.

e. Explain why a park of 5 acres is not optimal.

Question

In an effort to maintain privacy and enhance property values, three home owners, Deidre, Eugene and Farhad, are considering leasing a portion of adjoining vacant land for a private park. Table 5-1 shows each person's willingness to pay for each quantity of the land.

a. Complete the column in Table 5-1

b. Graph the marginal social benefit curve.

c. Suppose the landowner is willing to lease a portion of her land according to the following supply schedule given in Table 5-2. On the same diagram, graph the supply curve.

d. What is the optimal quantity of land that homeowners should lease? Explain your answer.

e. Explain why a park of 5 acres is not optimal.

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The Answer of 
In an effort to maintain privacy and enhance property values, three home owners, Deidre, Eugene and Farhad, are considering leasing a portion of adjoining vacant land for a private park. Table 5-1 shows each person's willingness to pay for each quantity of the land.

a. Complete the column in Table 5-1

b. Graph the marginal social benefit curve.

c. Suppose the landowner is willing to lease a portion of her land according to the following supply schedule given in Table 5-2. On the same diagram, graph the supply curve.

d. What is the optimal quantity of land that homeowners should lease? Explain your answer.

e. Explain why a park of 5 acres is not optimal.

In an Effort to Maintain Privacy and Enhance Property Values