Suppose we are considering fire hydrants in a small neighborhood. For simplicity, assume that only two individuals live in this neighborhood; Bob and Nancy. Once the fire hydrants are supplied by the city, they are automatically available to both Bob and Nancy. Thus, we can view the fire hydrants as public goods. The table below summarizes Bob and Nancy’s individual marginal willingness to pay for fire hydrants. Number of Fire Hydrants Bob’s MWTP Nancy’ MWTP 1 $480 $80 2 400 60 3 320 40 4 240 20 5 160 0 Suppose that one fire hydrant is provided in the neighborhood. Bob and Nancy are both being charged a municipal tax of $300 each to pay for the hydrant. Would Bob or Nancy (or both) be considered a ‘free rider’? Explain your answer. In this scenario I think that, Bob is not considered a free rider because his willingness to pay for the first fire hydrant $480 exceeds the municipal tax of $300. However, Nancy is deemed a free rider as her marginal willingness to pay for the first hydrant is only $80, less than the $300 tax. This means that Nancy is benefiting from the fire hydrant without fully contributing an amount equivalent to her valuation, while Bob is willingly covering the cost associated with the hydra