Luis, Mina, and Daniel All Would Like a Play Area

question 39

Multiple Choice

Luis, Mina, and Daniel all would like a play area while waiting at their children's bus stop. The neighborhood association is considering installing playground equipment at the bus stop. Luis values the equipment at $150, Mina at $100, and Daniel at $100. The equipment and labor for installation cost $300. If Luis, Mina, and Daniel are the only residents who value the equipment, what should the neighborhood association do?

• A)Install the playground equipment because people would like a play area.
• B)Do not install the playground equipment because the costs outweigh the benefits.
• C)Install the playground equipment because the benefits outweigh the costs.
• D)Do not install the playground equipment to prevent the Tragedy of the Commons problem of overuse.

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Definitions:

Incidental Beneficiary

A person or entity that indirectly gains a benefit from a contract to which they are not a party, without the contract specifically intending such benefit.

Beneficiary

A person or entity entitled to receive benefits or assets under a legal arrangement or instrument, such as a will, trust, or insurance policy.

Third-party Beneficiary

An individual or legal entity that gains a benefit from a contract despite not being one of the primary parties involved.

Creditor Beneficiary

A third party that benefits from a contract wherein the promisor agrees to pay the promisee's debt to the beneficiary.