Questions 43 - 44 are also about Public Goods and belong to the following setup. The table below shows individual marginal willingness to pay (MWP) for lowering lake pollution by tree homeowners (

A,B

, and C) living on that lake. Pollution is measured by the Level of Contaminant (ppm

=0

means clean water; going from 0 to 5 means less and less clean). Initially, the level is 5 ppm.\ The last column shows the Marginal Cost (MC) of cleanup for different levels of contamination. For example, 50 is the cost of lowering the ppm from 5 to 4 and 65 is the cost of going from

4pm

to

3ppm

.\ Similarly, the A's MWP for going from

5ppm

to

4ppm

is 110 and so on.\ \\\\table[[\\\\table[[Marginal Willingness to],[Pay ($ per year)]],,,,,],[\\\\table[[Home-],[owner A]],\\\\table[[Home-],[owner B]],\\\\table[[Home-],[owner C]],\\\\table[[Aggregate],[MWP]],\\\\table[[Marginal Cost],[of Cleanup]]],[110,60,30,200,50],[85,35,20,140,65],[70,10,15,95,95],[1,55,0,10,65,150],[0,45,0,5,50,240]]\ Assume the homeowners just cannot agree on fair contributions to the cleanup (want to free ride) so it's up to the local regulator to decide how much to charge each for efficient water quality level.\ According to the table numbers, what is the socially efficient level of contaminant in ppm?\ Efficiency is defined as maximizing the total surplus (net gain) from lowering the ppm (contaminant level), which comes at a cost.

Questions 43 - 44 are also about Public Goods and belong to the following setup. The table below shows individual marginal willingness to pay (MWP) for lowering lake pollution by tree homeowners ( A,B, and C ) living on that lake. Pollution is measured by the Level of Contaminant (ppm =0 means clean water; going from 0 to 5 means less and less clean). Initially, the level is 5 ppm. The last column shows the Marginal Cost (MC) of cleanup for different levels of contamination. For example, 50 is the cost of lowering the ppm from 5 to 4 and 65 is the cost of going from 4pm to 3 ppm. Similarly, the A's MWP for going from 5 ppm to 4 ppm is 110 and so on. Assume the homeowners just cannot agree on fair contributions to the cleanup (want to free ride) so it's up to the local regulator to decide how much to charge each for efficient water quality level. According to the table numbers, what is the socially efficient level of contaminant in ppm? Efficiency is defined as maximizing the total surplus (net gain) from lowering the ppm (contaminant level), which comes at a cost