3. Suppose that there are only three households in the town in Problem 1. Each household’s marginal benefit (in dollars) from additional firefighters is described in the following table:

a. Plot each of the three marginal benefit schedules and the marginal benefit schedule for the whole town on the same graph, with the number of firefighters on the horizontal axis. (You will need a big vertical scale.) What is the relationship between the three household curves and the curve for the whole town?

b. Consider a system in which the town chooses the optimal amount of the public good and decides to pay for it by taxing each household the identical dollar amount. Which of the households would rather free-ride than pay the taxes, if it were possible to evade paying taxes?

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Number of Household Household Household Firefighters A B C 1234567890 500,000 300,000 200,000 300,000 100,000 100,000 200,000 50,000 50,000 50,000 30,000 20,000 36,000 20,000 14,000 25,000 15,000 10,000 20,000 14,000 6,000 15,000 13,000 2,000 10,000 9,000 1,000 5,000 4,500 500