Mike Miller is the town manager of Medfield, a town with 50,000 residents. At a recent town meeting, several citizens proposed building a large public swimming pool in the center of town for all of the residents to enjoy. A survey of all 50,000 residents revealed that the pool would be worth $50 to each of them. The cost to build the swimming pool is $1,000,000 . Which of the following is the
most efficient option?
a. The pool should be built and paid for with donations collected from residents, as these donations should more than cover the cost of the pool.
b. The pool should be built and paid for by the town government and paid for with a tax on the residents because all residents would benefit from it but some residents would not donate if they were asked.
c. The pool should be built and paid for by the wealthiest ten percent of the residents.
d. The pool should not be built because the social value does not exceed the cost.
b
You might also like to view...
If new firms enter the computer manufacturing industry, then, holding all other things constant,
A. each “old” manufacturer must sell fewer computers than before. B. some “old” manufacturers must exit the industry. C. the equilibrium price of computers will rise. D. the equilibrium quantity demanded of computers will rise.
Based on Table 4.1, according to the Stolper-Samuelson Theorem, the income distribution effects of free trade in the United States are likely to favor
A) capital. B) labor. C) either capital or labor, depending on U.S. productivity. D) neither capital nor labor. E) Not enough information to tell.
In the case of the simple regression model Yi = ?0 + ?1Xi + ui, i = 1, …, n, when X and u are correlated, then
A) the OLS estimator is biased in small samples only. B) OLS and TSLS produce the same estimate. C) X is exogenous. D) the OLS estimator is inconsistent.
In the circular flow model, businesses
A. demand both products and resources. B. supply both products and resources. C. demand products and supply resources. D. supply products and demand resources.