Suppose you enjoy watching television on PBS, a broadcast station which you can

Question

Suppose you enjoy watching television on PBS, a broadcast station which you can receive on your TV with your antenna. In fact, your willingness-to-pay for a year’s worth of programming on PBS is $80. PBS is currently in a fundraising campaign to get those who watch the station to contribute to help fund next year’s programming.   They are asking for a $50 contribution. If you want to maximize your consumer surplus, do you make the contribution or not?

Select one:

a. Make contribution

b. Do not make contribution

Explanation / Answer

a. Make contribution because our willingness to pay for a year programming is greater than the requested amount. It means that person get more benefit from this programming that the amount which they are asking for. Due to this reason, person will contribute and maximize its surplus.

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