Table 11-2
Consider a small town with only three families, the Greene family, the Brown family, and the Black 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.
-Refer to Table 11-2. Suppose the cost to install each streetlight is $360 and the families have agreed to split the cost of installing the streetlights equally. If the residents choose to install the number of streetlights that will maximize total surplus from the streetlights, how much total surplus will the Greene family receive?
A)-$80
B)$320
C)$360
D)$480

Question

Table 11-2
Consider a small town with only three families, the Greene family, the Brown family, and the Black 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. 
-Refer to Table 11-2. Suppose the cost to install each streetlight is $360 and the families have agreed to split the cost of installing the streetlights equally. If the residents choose to install the number of streetlights that will maximize total surplus from the streetlights, how much total surplus will the Greene family receive?
A)-$80 
B)$320 
C)$360 
D)$480

Quizplus · Accepted Answer

The Greene family will receive a total surplus of $320. This is calculated by taking the benefit they receive from the streetlights and subtracting their share of the cost. If the number of streetlights maximizes total surplus, the benefit to the Greene family exceeds their share of the cost, resulting in a positive surplus.

Table 11-2 Consider a Small Town with Only Three Families, the Greene