In an effort to maintain privacy and enhance property values, three home owners, 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.
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.
Definitions:
Informal Fallacy
A form of flawed logic where an argument feels emotionally or psychologically compelling yet fails to hold up under logical scrutiny.
Begs the Question
A logical fallacy where the argument's premise assumes the truth of the conclusion, instead of supporting it.
Popular Appeal
An appeal to popular opinion to gain support for our conclusion.
Famous Person
An individual who has gained widespread recognition and public attention.
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