Tutorial 12 (Ch11) Team D Ch.11 Public Goods and Common Resources Problems and Applications: 3 and 11 (Textbook) Supplementary Questions: 1 and 2 Supplementary Questions 1. Answer the following questions: (a) Explain why overhunting, which leads to the endangerment of certain species, is an example of the tragedy of the commons. (b ) Would it make sense for the government to pay property owners a fee for allowing an endangered species to reside on their property? Explain. 2 . Consider a small town with only three families, the Jones family, the Harris family, and the Wong family. The town does not currently have any streetlights so it is very dark at night. The three families are considering putting on 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 Jones Family The Harris Family The Wong Family Streetlights $180 $250 $220 140 200 210 IAWN 90 140 180 30 70 130 0 35 60 20 a. Suppose the cost to install each streetlight is $400. How many streetlights should the town install to maximize total surplus from the streetlights? b. Suppose the cost to install each streetlight is $200. How many streetlights should the town install to maximize total surplus from the streetlights? . Suppose the cost to install each streetlight is $400 and the families have agreed to split the cost of the streetlights equally. If the families vote to determine the number of streetlights to install, basing their decision solely on their own willingness to pay (and trying to maximize their own surplus), what is the greatest number of streetlights for which the majority of families would vote "yes?" d. Suppose the cost to install each streetlight is $200 and the families have agreed to split the cost of installing the streetlights equally. To maximize their own surplus, how many streetlights would the Jones's like the town to install? e. Without the above table, it would be difficult for the government consider how many streetlights should be build. Why