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

question 174

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:

Environmental Law

Regulations and statutory requirements aimed at protecting the environment from harm caused by human activities.

Bankruptcy Proceeding

A legal process through which individuals or businesses that are unable to repay debts can seek relief from some or all of their obligations.

Environmental Impact Statement

A document prepared to describe the effects proposed projects will have on the environment, used to guide decision-making in project approval processes.

Chapter 11 Bankruptcy

A section of the United States Bankruptcy Code providing for reorganization, typically involving a corporation or partnership, under which a debtor proposes a plan to keep its business alive and pay creditors over time.