Table 11-2
Consider the city of Widgetapolis with only four residents, John, James, Mary, and Lydia. The four residents are trying to determine how many hours to spend in cleaning up the public lake. The table below shows each resident's willingness to pay for each hour of cleaning.

$$\begin{array} { l l l l l }
\hline \text { Hours } & \text { John } & \text { James } & \text { Mary } & \text { Lydia } \
\hline 1 & \$ 30 & \$ 50 & \$ 40 & \$ 10 \
2 & 25 & 40 & 37 & 9 \
3 & 20 & 30 & 34 & 8 \
4 & 15 & 20 & 30 & 7 \
5 & 9 & 10 & 25 & 6 \
6 & 3 & 0 & 15 & 5 \
7 & 0 & 0 & 5 & 4 \
\hline
\end{array}$$
-Refer to Table 11-2. Suppose the cost to clean the lake is $32 per hour and that the residents have agreed to split the cost of cleaning the lake equally. It would maximize Lydia's surplus if 6 hours of cleaning is done.

Question

Table 11-2
Consider the city of Widgetapolis with only four residents, John, James, Mary, and Lydia. The four residents are trying to determine how many hours to spend in cleaning up the public lake. The table below shows each resident's willingness to pay for each hour of cleaning.
​
 $$\begin{array} { l l l l l } 
\hline \text { Hours } & \text { John } & \text { James } & \text { Mary } & \text { Lydia } \
\hline 1 & \$ 30 & \$ 50 & \$ 40 & \$ 10 \
2 & 25 & 40 & 37 & 9 \
3 & 20 & 30 & 34 & 8 \
4 & 15 & 20 & 30 & 7 \
5 & 9 & 10 & 25 & 6 \
6 & 3 & 0 & 15 & 5 \
7 & 0 & 0 & 5 & 4 \
\hline
\end{array}$$ ​
-Refer to Table 11-2. Suppose the cost to clean the lake is $32 per hour and that the residents have agreed to split the cost of cleaning the lake equally. It would maximize Lydia's surplus if 6 hours of cleaning is done.
​

Quizplus · Accepted Answer

Lydia's willingness to pay decreases with each additional hour, and by the 6th hour, her willingness to pay is only $5, which is less than her share of the cost if the cost is split equally among four residents ($32 per hour total cost means $8 per resident). Therefore, Lydia's surplus would not be maximized by cleaning for 6 hours.

Table 11-2 Consider the City of Widgetapolis with Only Four

Table 11-2
Consider the City of Widgetapolis with Only Four