1.(10 points) Suppose in a community 10 people each have a Marginal Benefit from streetlights equal toMB=5-2Q, and five people each have a Marginal Benefit for streetlights of MB=7-Q, where Q is...

1.(10 points) Suppose in a community 10 people each have a Marginal Benefit from streetlights equal toMB=5-2Q, and five people each have a Marginal Benefit for streetlights of MB=7-Q, where Q is thequantity of streetlights. The marginal cost of a streetlight is MC=3.a.b.2.Sketch the MSB curve for the society.What is the socially optimal number of streetlights (it’s OK here to have a fractional number ofstreetlights).(20 points) Arnold and Betty have identical marginal benefit formulas for a public good. The MBs aregiven by :MBA =a (YA +qB ) – b Q *MBB =a (YB +q A ) – b Q *where, Q* =q A +qBα and β are constant positive numbers, α