1. Mike, Rosie, and Shobber live in separate houses along a dark and windy road. The following represent their marginal benefits for street lights:

MB_Mike=200-2Q_M

MB_Rosie=100-Q_R

MB_Shobber=100-2Q_S

where Q_M represents the quantity of street lights consumed by Mike, Q_R is the quantity of street lights consumed by Rosie and Q_S is the quantity of street lights consumed by Shobber. The Mayor of their town considers street lights to be a public good and is charged with purchasing the optimal number of street lights from Boones Light Shop. Boones is willing to sell street lights for $150 per light.

1. In what sense, if any, do street lights qualify as a public good? What is the relationship between Q_M, Q_R, and Q_S (i.e., greater than, less than or equal to) likely to be when the Mayor installs the lights? Why?

2. What quantity of street lights should the Mayor purchase? Why? Suppose the Mayor is able to implement a pricing scheme to charge users for the illumination services.
3. How much should each individual be charged? Does the tax revenue cover the total cost of providing the optimal number of streetlights?