Assume That Abby, Ben, and Clara Are the Only Citizens

question 189

Multiple Choice

Assume that Abby, Ben, and Clara 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 $400 each to Abby, Ben, and Clara. Based on economic analysis, the public good should

• A)be produced, because the benefits are greater than the costs.
• B)not be produced, because the costs are greater than the benefits.
• C)be put to a vote and produced only if voters approve it.
• D)not be produced, even if voters vote in favor of it.