Derive the net benefits table

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Reference no: EM132219607

Question - Consider three residents A, B and C receiving benefits from installing 0-3 street lights as shown in the following table.

Resident	No. of Street Lights
Resident	0	1	2	3
A	0	80	120	140
B	0	60	90	155
C	0	120	200	220
Total Cost of Lights	0	120	240	360

i. Derive the net benefits table.

ii. Which resident has an incentive to lie?

iii. If she lies and states her benefits as double the actual net benefit how much the Clarke Tax?

iv. Show that she has no incentive to lie under Clarke Tax.

Reference no: EM132219607

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