Answer the Question on the Basis of This Table Showing

question 241

Multiple Choice

Answer the question on the basis of this table showing the marginal benefit 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)pass this project and resources will be allocated efficiently.
• C)pass this project and resources will be overallocated to it.
• D)pass this project and resources will be underallocated to it.

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Definitions:

Excise Tax

A tax imposed on specific goods, services, or activities to raise revenue or discourage their use.

Revenue

The total income generated by a business or organization from its normal business operations.

Supply Curve

A graphical representation showing the relationship between the quantity of goods suppliers are willing to produce and the price of those goods.

Price Ceiling

A government-imposed limit on how high a price can be charged on a product or service.