When Majority Rule Voting Is Used to Determine Whether to Purchase

question 43

Multiple Choice

When majority rule voting is used to determine whether to purchase a public good,

• A) the efficient outcome is assured.
• B) the median voter gets her way.
• C) the sum of the marginal benefits must equal marginal cost.
• D) the marginal benefit of the good to the median voter equals the good's marginal cost.

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Definitions:

Investment Income

Investment income refers to the revenue generated from holding financial assets, including dividends, interest, and capital gains.

Long-Term Investment

Investments in assets or securities that a company intends to hold for a period longer than one year.

Common Stock

Equity ownership in a corporation, often with voting rights, representing a claim on a portion of the company's profits.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee but not control or jointly control over those policies.