Table 11-5 A Small Island Off the Coast of Cape Cod Contains

question 412

Multiple Choice

Table 11-5
A small island off the coast of Cape Cod contains two restaurants and two retail stores. Tourists need to take a ferry boat to reach the island, but with a recent slowdown in the economy, tourists are less willing to pay for the boat ride to visit the island. The owners of the restaurants and stores on the island - Restaurants 1 and 2, and Stores A and B - think that if tourists could ride the ferry for free, they would be happy to visit the island, eat and shop. The business owners are considering contributing to a pool of money that will be used to pay for roundtrip ferry service each day. The table represents their willingness to pay, that is, the maximum amount that each business owner is willing to contribute, per day, to pay for each ferry trip.
-Refer to Table 11-5. Suppose the cost to run the ferry for each roundtrip is $1,000. How many ferry trips should there be to maximize the total surplus of the four business owners?

• A)1
• B)2
• C)3

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Definitions:

College Costs

The expenses associated with attending a college or university, which may include tuition, fees, room, board, books, and other related costs.

McClelland

A psychologist known for his work on motivation, particularly the Theory of Needs focusing on achievement, power, and affiliation.

Achievement Motivation

The inner drive or need to attain a goal or reach a particular standard of success.

Expectancy Model

The expectancy model, often applied in motivational theory, posits that an individual's motivation is determined by their expected outcomes of specific behaviors or efforts.