Refer to the Information Given in Table 16 -Refer to Table 16

question 94

Multiple Choice

Refer to the information given in Table 16.6 below to answer the question that follows.
Table 16.6 $\begin{array} { ccc } \text { Number of } & \text { Tim's } & \text { Al's }\\\text {Police Officers}& \text { Willingness to Pay}& \text { Willingness to Pay}\\\hline1 & \$ 100 & \$ 60 \\2 & 80 & 20 \\3 & 50 & 0\\\hline \end{array}$


-Refer to Table 16.6. Assume that the marginal cost of hiring a police officer is $100. If A and B are the only two people in the society, the optimal number of police officers is

• A) 1.
• B) 2.
• C) 3.
• D) indeterminate from this information.

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Definitions:

Par Value

The face value of a bond or stock, as specified by the issuing company, which is the minimum price at which the securities can be issued initially.

Retirement

The process of removing an asset from service after its useful life has ended, often involving its disposal or sale.

Gain or Loss

The financial result from a transaction that leads to an increase (gain) or decrease (loss) in the asset value of a company.

Straight-line Amortization

A method of evenly spreading out the cost of an intangible asset over its useful life.