ECON 134A Final: ECON 134A UCSB Final A 1pmx 2013Fall
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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 Streetlights | The Johnson Family | The Marshall Family | The Walker Family |
1 | $170 | $240 | $210 |
2 | 130 | 190 | 200 |
3 | 80 | 130 | 170 |
4 | 20 | 65 | 120 |
5 | 0 | 25 | 50 |
6 | 0 | 0 | 10 |
Suppose the cost to install each streetlight is $450, and the families have agreed to split the cost of installing the streetlights equally. To maximize their own surplus, how many streetlights would the Walker's like the town to install?
A. 1 streetlight
B. 2 streetlights
C. 0 streetlights
D. 3 streetlights