Table 11-2 Consider a Small Town with Only Three Families,the Jones Family,the

question 1

Multiple Choice

Table 11-2
Consider a small town with only three families,the Jones family,the Harris family,and the Wong family.The town does not currently have any streetlights so it is very dark at night.The three families are considering putting in streetlights on Main Street and are trying to determine how many lights to install.The table below shows each family's willingness to pay for each streetlight.

-Refer to Table 11-2.Suppose the cost to install each streetlight is $400 and the families have agreed to split the cost of installing the streetlights equally.To maximize their own surplus,how many streetlights would the Wong's like the town to install?

• A) 0 streetlights
• B) 1 streetlight
• C) 2 streetlights
• D) 3 streetlights

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Definitions:

Net Income

The total earnings or profit of a business after subtracting all expenses, taxes, and costs.

Discretionary Income

The amount of an individual's income that is left for spending, investing, or saving after taxes and personal necessities (like food and shelter) are taken care of.

Gross Income

Total earnings received by an individual or company before any deductions such as taxes, expenses, and other contributions.

Disposable Income

The amount of money an individual or household has available to spend or save after taxes and necessities have been paid.