Question

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.

Darnell

Eleanor

Jacques

Answer 1

Answer:

Thus, option b and c are correct.

Explanation:

Suppose that there are two towns. Each town has three members to put on a fireworks display. The cost of fireworks is $300.

Find the total benefits of the fireworks display to the town of B.

Total benefit = value to Darnell + value to eleanor + value to Jacques

= 70+90+150 =$310

Thus, total benefit of the fireworks display to the town of B is $310.

Since the total benefits to the persons is greater than the total costs, therefore, fireworks would pass the cost- benefits analysis in the town of B.

The mayor of B said to spilt the cost among all the residents. Each of the residents will bear s $100 ($300/3).

Darnell and Eleanor will not vote for this because cost to them is more than the value to them. Remaining Jacques

will vote for this because cost to him is less than the value to him for this.

Thus, Jacques will vote in favor of this.

Thus, option c is correct.

Therefore, vote would not yield the same answer as the cost-benefit analysis.

Find the total benefits of the fireworks display to the town of RH.

Total benefit = value to kyoko + value to Musashi + value to Rina

= 50 +110+ 120 = $280

Thus, total benefit of the fireworks display to the town of RH is $280.

Since the total benefits to the persons is less than the total costs, therefore, fireworks would not pass the cost- benefits analysis in the town of RH.

The mayor of RH said to spilt the cost among all the residents. Each of the residents will bear $100 &$300/3).

Kyoko will not vote for this because cost to them is more than the value to them. Remaining Musashi and Rina will vote for this because cost to him is less than the value to him for this.Thus, Musashi and Rina will vote in favor of this.

Thus, option b and c are correct.

Therefore, vote would not yield the same answer as the cost-benefit analysis.

The following statements are correct about the provision of public goods.

It is hard for the government to decide the appropriate amount of public goods to produce because people have differing preferences regarding such goods. Thus, option b is correct.