Table 17-1 Imagine a Small Town in Which Only Two Residents, Rochelle

question 465

Multiple Choice

Table 17-1
Imagine a small town in which only two residents, Rochelle and Alec, own wells that produce safe drinking water. Each week Rochelle and Alec work together to decide how many gallons of water to pump. They bring the water to town and sell it at whatever price the market will bear. To keep things simple, suppose that Rochelle and Alec can pump as much water as they want without cost so that the marginal cost of water equals zero. The town's weekly demand schedule and total revenue schedule for water is shown in the table below:
-Refer to Table 17-1. What is the socially efficient quantity of water?

• A)0 gallons
• B)600 gallons
• C)900 gallons
• D)1,200 gallons

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Definitions:

Egocentrism

The lack of capability to distinguish between one's own viewpoint and the viewpoint of another person, commonly observed in the early stages of childhood growth.

Stranger Anxiety

A developmental stage in infants where they show distress or fear in the presence of unfamiliar people.

Object Permanence

The understanding that objects continue to exist even when they cannot be seen, heard, or otherwise sensed, a critical concept in cognitive development of infants.

Sexual Orientation

A persistent tendency to experience emotional, romantic, or sexual interest in men, women, or both genders.