Two towns, each with three members, are deciding whether to put on a fireworks display to celebrate the New Year. Fireworks cost $300. In each town, some people enjoy fireworks more than others.
In the town of Bayport, each of the residents values the public good as follows:
Resident Value
(Dollars)
Darnell 70
Eleanor 90
Jacques 150
The total benefit of the fireworks display to the town of Bayport is ($ ).
Therefore, fireworks (would/would not) pass the cost-benefit analysis in the town of Bayport.
The mayor of Bayport proposes to decide by majority rule and, if the fireworks referendum passes, to split the cost equally among all residents.
Who would vote in favor of the fireworks referendum? Check all that apply.
1. Darnell
2. Eleanor
3. Jacques
The vote (would/would not) yield the same answer as the cost-benefit analysis.
In the town of River Heights, each of the residents values the public good as follows:
Resident Value
(Dollars)
Kyoko 50
Musashi 110
Rina 120
The total benefit of the fireworks display to the town of River Heights is ($ ).
Therefore, fireworks (would/would not) pass the cost-benefit analysis in the town of River Heights.
The mayor of River Heights also proposes to decide by majority rule and, if the fireworks referendum passes, to split the cost equally among all residents.
Who would vote in favor of the fireworks referendum?
1. Kyoko
2. Musashi
3. Rina
The vote (would/would not) yield the same answer as the cost-benefit analysis.
Which of the following statements is correct about the provision of public goods?
1. Majority rule is the most efficient way to determine the amount of public goods a society should produce.
2. It is hard for the government to decide the appropriate amount of public goods to produce because people have differing preferences regarding such goods.
3. The government always provides the exact types of public goods that everyone in the society wants.