Answer the Question on the Basis of This Table Showing

question 26

Multiple Choice

Answer the question on the basis of this table showing the marginal benefit that a particular public project will provide to each of the three members of a community.No vote trading is allowed. If the tax cost of this proposed project is $600 per person, a majority vote will:

• A)defeat this project and resources will be underallocated to it.
• B)defeat this project and resources will be allocated efficiently.
• C)pass this project and resources will be overallocated to it.
• D)defeat this project and resources will be overallocated to it.

---

Definitions:

External Benefits

Positive effects of a production or consumption activity on third parties not directly involved in the transaction, leading to social or economic benefits.

Total Surplus

The sum of consumer and producer surplus, representing the total net benefit to society from a market transaction.

Socially Efficient Quantity

The level of production of a good or service that results in the optimal combination of economic efficiency and social welfare.

Market Equilibrium

A market state where the supply of goods matches demand, resulting in stable prices where the quantity of goods buyers are willing to buy equals the quantity sellers are willing to sell.