Consider a small town with only three families, the Johnson family, the Marshall family, and the Walker 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. Number of The Johnson The Marshall The Walker Streetlights Family Family Family 1 $170 $240 $210 2 130 190 200 3 80 130 170 4 20 65 120 5 0 25 50 6 0 10 Refer to Table 11-2. Suppose the cost to install each streetlight is $180 and the families have agreed to split the cost of installing the streetlights equally. To maximize their own surplus, how many streetlights would the Johnson's like the town to install? O streetlights 1 streetlight 2 streetlights 3 streetlights

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Consider a small town with only three families, the Johnson family,
the Marshall family, and the Walker 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.
Number of The Johnson The Marshall
The Walker
Streetlights
Family
Family
Family
1
$170
$240
$210
2
130
190
200
3
80
130
170
4
20
65
120
5
0
25
50
6
0
10
Refer to Table 11-2. Suppose the cost to install each streetlight is
$180 and the families have agreed to split the cost of installing the
streetlights equally. To maximize their own surplus, how many
streetlights would the Johnson's like the town to install?
O streetlights
1 streetlight
2 streetlights
3 streetlights
Transcribed Image Text:Consider a small town with only three families, the Johnson family, the Marshall family, and the Walker 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. Number of The Johnson The Marshall The Walker Streetlights Family Family Family 1 $170 $240 $210 2 130 190 200 3 80 130 170 4 20 65 120 5 0 25 50 6 0 10 Refer to Table 11-2. Suppose the cost to install each streetlight is $180 and the families have agreed to split the cost of installing the streetlights equally. To maximize their own surplus, how many streetlights would the Johnson's like the town to install? O streetlights 1 streetlight 2 streetlights 3 streetlights
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