Table 11-6Consider 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.HoursJohnJamesMary Lydia1$30$50$40$102254037 93203034 84152030 7591025 663015 57005 4Refer to Table 11-6. Suppose the cost to clean the lake is $40 per hour and that the residents have agreed to split the cost of cleaning the lake equally. If it was decided that the lake will be cleaned for the number of hours that maximizes total surplus of Widgetapolis, how much individual surplus will Mary receive in total? a.$116 b.$15 c.$25 d.-$10

The total surplus would be maximised when the cost would be equal to benefits or willingness to pay…

Answered: Table 11-6 Consider the city of…

Principles of Microeconomics (MindTap Course List)

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Chapter10: Externalities

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Table 11-6

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.

Hours	John	James	Mary	Lydia
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

Refer to Table 11-6. Suppose the cost to clean the lake is $40 per hour and that the residents have agreed to split the cost of cleaning the lake equally. If it was decided that the lake will be cleaned for the number of hours that maximizes total surplus of Widgetapolis, how much individual surplus will Mary receive in total?

	a.	$116
	b.	$15
	c.	$25
	d.	-$10

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