Assume That Matt, Joe, and Teresa Are the Only Citizens

question 221

Multiple Choice

Assume that Matt, Joe, and Teresa are the only citizens in a community. A proposed public good has a total cost of $1,000. All three citizens will share an equal portion of this cost in taxes. The benefit of the public good is $380 for Matt, $360 for Joe, and $200 for Teresa. In a majority vote, this proposal will most likely be

• A)accepted; the public good is produced, even though it is economically inefficient.
• B)defeated; the public good is not produced, even though it would have been efficient to do so.
• C)accepted; the public good is produced, which is economically efficient.
• D)defeated; the public good is not produced, which is the proper outcome.

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Definitions:

British Pounds

Refers to the official currency of the United Kingdom, known for its symbol £ and its code GBP.

Sales Credited

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Spot Rate

The present market rate at which a specific currency is available for purchase or sale for on-the-spot delivery.

Foreign Currency

Currency used in a country other than one's own, involved in international transactions or investments.