Question

Two towns, each with three members, are deciding whether to put on a fireworks display to celebrate the New Year. Fireworks cost $360. In each town, some people enjoy fireworks more than others. In the town of Bayport, each of the residents values the public good as follows:

Resident Value (Dollars)
Musashi 50
Rina 100
Sean 300

he total benefit of the fireworks display to the town of Bayport is $: ___________

Answer 1

$450

Step-by-step explanation:

The benefit an individual derives from an activity can be described as the total satisfaction or utility that individual derives from carrying out a particular activity. It is the value an individual derives from a particular activity

Benefit can be measured in dollars or in utils

the higher the value of the dollar or util, the higher the benefit the consumer derives from an activity

A rational person would weigh the cost of an activity to the benefit that would be derived from the activity. The individual would carry out the activity only if benefit outweigh the cost.

For example, in this question, the total benefit of fireworks display is 450. this is greater than the cost. So, the town would carry out the firework display

Total benefit is the sum of individual value individuals would derive from an activity.

total benefit = $50 + $100 + $300 = $450