Table 11-1 Consider the Town of Springfield with Only Three Residents, Sophia

question 166

Multiple Choice

Table 11-1
Consider the town of Springfield with only three residents, Sophia, Amber, and Cedric. 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 $9 per acre. How large should the park be to maximize total surplus from the park in Springfield?

• A)2 acres
• B)3 acres
• C)4 acres
• D)5 acres

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Definitions:

Complement Rate

The percentage subtracted from 100% to find the remaining portion of a rate, often used in insurance and finance to determine net rates.

Discount Date

The date on which a bill of exchange or other payment instrument is discounted, meaning it is computed for present value before its maturity date.

Freight Charge

A fee charged for the transportation of goods by freight services, often based on the weight and distance.

Cash Discount

A reduction in the price of goods or services offered to a buyer in order to encourage prompt payment.