Table 11-5 A Small Island Off the Coast of Cape Cod Contains

question 276

Multiple Choice

Table 11-5
A small island off the coast of Cape Cod contains two restaurants and two retail stores. Tourists need to take a ferry boat to reach the island, but with a recent slowdown in the economy, tourists are less willing to pay for the boat ride to visit the island. The owners of the restaurants and stores on the island - Restaurants 1 and 2, and Stores A and B - think that if tourists could ride the ferry for free, they would be happy to visit the island, eat and shop. The business owners are considering contributing to a pool of money that will be used to pay for roundtrip ferry service each day. The table represents their willingness to pay, that is, the maximum amount that each business owner is willing to contribute, per day, to pay for each ferry trip.
-Refer to Table 11-5. Suppose the cost to run the ferry for each roundtrip is $750. How many ferry trips should there be to maximize the total surplus of the four business owners?

• A)1
• B)2
• C)3

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Definitions:

Sebaceous Glands

Small oil-producing glands in the skin that secrete sebum into hair follicles to lubricate the skin and hair.

Acne Vulgaris

A common skin condition that occurs when hair follicles become clogged with oil and dead skin cells, leading to whiteheads, blackheads, or pimples.

Inflammation

A biological response to harmful stimuli, marked by redness, heat, swelling, pain, and often loss of function, part of the body's immune response.

Scratch Test

An allergy test in which extracts of suspected allergens are applied to the patient’s skin and the skin is then scratched to allow the extracts to penetrate.