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

question 155

Multiple Choice

Table 11-2
Consider a small town with only three families, the Greene family, the Brown family, and the Black 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 $360. How many streetlights should the town install to maximize total surplus from the streetlights?

• A)1 streetlight
• B)2 streetlights
• C)3 streetlights
• D)4 streetlights

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Definitions:

End-Of-Month Payments

Payments made at the conclusion of a calendar month, often relating to salaries, bills, or loans.

Compounded Quarterly

The process of calculating interest on both the initial principal and the accumulated interest over four periods within a year.

Initial Deposit

The first sum of money placed in an account, marking the beginning of an investment or savings plan.

Compounded Semi-Annually

An interest calculation method where the interest is added to the principal two times a year, accelerating the growth of an investment or debt.