Kris, Taylor and Max Are the Only Three Residents in a Neighborhood

question 90

Multiple Choice

Kris, Taylor and Max are the only three residents in a neighborhood. A public good that would benefit all of them has a one-time installation cost of $900. The value of the public good to each resident is shown in the table below. Any tax plan must be approved by simple majority. $$\begin{array} { | c | c | c | } \hline \text { Resident } & \text { Reservation Price } & \text { Income } \\\hline \text { Kris } & \$ 100 & \$ 1,000 \\\hline \text { Taylor } & \$ 200 & \$ 5,000 \\\hline \text { Max } & \$ 700 & \$ 6,000 \\\hline\end{array}$$ Installing the public good would ______ total economic surplus by ______.

• A)increase; $100
• B)decrease; $100
• C)decrease; $900
• D)increase; $1,000

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Definitions:

Ethical Behaviour

Conduct that is in accordance with accepted principles of right and wrong governing the professional and personal actions of individuals.

Amoral Manager

A manager who fails to consider the ethics of her or his behaviour.

Ethical Implications

The potential impact or consequences of actions or decisions on moral principles and standards.

Ethics Intensity

The extent to which an ethical issue demands moral reflection or action, influenced by its potential impact on stakeholders and society.