Table 11-1 Consider the Town of Tritown with Only Three Residents,Ed,Jim,and Tony.The

question 165

Multiple Choice

Table 11-1
Consider the town of Tritown with only three residents,Ed,Jim,and Tony.The three residents are trying to determine how large,in acres,they should build the public park.The table below shows each resident's willingness to pay for each acre of the park.

-Refer to Table 11-1.Suppose the cost to build the park is $30 per acre and that the residents have agreed to split the cost of building the park equally.If the residents decide to build a park with size equal to the number of acres that maximizes total surplus from the park,how much total surplus will Ed receive?

• A) -$6
• B) -$2
• C) $2
• D) $10

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Definitions:

Price Elasticity of Supply

An indicator of the extent to which the supply of a product reacts to a shift in its price.

Midpoint Method

A technique utilized in economics to calculate the percentage change between two values, minimizing the distortion from the choice of base value by using the average of the initial and final values as the base.

Inelastic Demand

A situation where the demand for a product or service is relatively unresponsive to changes in price, meaning that price increases or decreases lead to small changes in the quantity demanded.

Bovine Infertility

A condition affecting cattle characterized by the inability to conceive, which can impact farm productivity and economics.