Table 51 In an Effort to Maintain Privacy and Enhance Property Values

question 36

Essay

Table 5.1
$\begin{array}{|c|c|c|c|c|}\hline \begin{array}{c}\text { Number of } \\\text { Acres }\end{array} & \begin{array}{c}\text { Deidre's } \\\text { Willingness to } \\\text { Pay (dollars) }\end{array} & \begin{array}{c}\text { Eugene's } \\\text { Willingness to } \\\text { Pay (dollars) }\end{array} & \begin{array}{c}\text { Farhad's } \\\text { Willingness to } \\\text { Pay (dollars) }\end{array} & \begin{array}{c}\text { Marginal } \\\text { Social Benefit } \\\text { (dollars) }\end{array} \\\hline 1 & \$ 180 & \$ 140 & \$ 150 & \\\hline 2 & 160 & 130 & 130 & \\\hline 3 & 140 & 120 & 110 & \\\hline 4 & 120 & 110 & 90 & \\\hline 5 & 100 & 100 & 70 & \\\hline 6 & 80 & 90 & 50 & \\\hline 7 & 60 & 80 & 30 & \\\hline 8 & 40 & 70 & 20 & \\\hline\end{array}$
In an effort to maintain privacy and enhance property values, three homeowners, 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.
Table 5.2
$\begin{array}{|c|c|}\hline \begin{array}{c}\text { Number of } \\\text { Acres }\end{array} & \begin{array}{c}\text { Price per Acre } \\\text { (dollars) }\end{array} \\\hline 1 & \$ 260 \\\hline 2 & 280 \\\hline 3 & 300 \\\hline 4 & 320 \\\hline 5 & 340 \\\hline 6 & 360 \\\hline 7 & 380 \\\hline 8 & 400 \\\hline\end{array}$
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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Definitions:

High Familiarity

A situation or condition where there is extensive knowledge or awareness about a particular topic, person, or context.

Negotiate Differently

Engaging in negotiation processes in varied manners, potentially adapting strategies based on the context or parties involved.

Perceptual Selection

The process by which individuals unconsciously or consciously select which sensory information to focus on and process.

Internal Factor

Elements within an organization or individual that can affect performance, decisions, and outcomes, such as values, culture, or resources.