Multiple Choice
A village has five residents, each of whom has an accumulated savings of $50. Each villager can use the money to buy a government bond that pays 10 percent interest per year or to buy a year-old goat, send it onto the commons to graze, and sell it after one year. The price of the goat that the villager will get at the end of the year depends on the amount of weight it gains while grazing on the commons, which in turn depends on the number of goats sent onto the commons, as shown in the table below. Assume that if a villager is indifferent between buying a bond and buying a goat, the villager will buy a goat.
What will be the total village income if each villager decides how to invest based on his or her individual self-interest?
A) $5
B) $125
C) $75
D) $25
Correct Answer:

Verified
Correct Answer:
Verified
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