Problem 4. 20 Points Suppose there are 1,000 voters in Stony Brook. A total of 4

Question

Problem 4. 20 Points Suppose there are 1,000 voters in Stony Brook. A total of 400 are willing to pay up to $25 each for the construction of a Park, whereas the other 600 are willing to pay only S10. The construction of the Park will cost $12,000. Someone proposes a vote on whether to tax each citizen $12 in order to finance the Park. (a) What will be the result according to the median voter model? Is this result socially efficient? Explain (b) What if instead of beign willing to pay up to $25 each, the 400 residents are willing to pay up to S50 each?

Explanation / Answer

A) As per median voter model - we should take $10 per person to construct the park however $10 * 1000 = 10,000 would not be enough to build the park.

B) In order to get $1200 just from 400 voters who are willing to pay $25, can pay $30 each to sum up $1200

Because taking $50 each would create surplus amount of money $20000

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.