Answer the question on the basis of the following table that shows the total costs and total benefits facing a city of five different potential baseball stadiums of increasing size. All figures are in millions of dollars.
Stadium Total Cost Total Benefit
A $80 $140
B 100 200
C 130 250
D 165 290
E 220 300
Applying the median-voter model and assuming that there are equal numbers of voters supporting each stadium, we would expect
Answer:
a. stadium C to be built, but this would not be the most socially efficient outcome.
Explanation:
The median voter model, is a term that describes a situation in which a form of majority rule voting system determines the eventual outcome wanted majorly by the median voter.
This is a means of trying to reach conclusion based on median rule, most specifically, when equal number of voters are supporting different alternatives.
Hence, in this case, using median voter model will ensure that stadium C is built, however, stadium E would be most socially efficient outcome.
