Suppose that Steve and Susie each perceives $200 of marginal benefit from a proposed new park,whereas Elizabeth perceives $800.If the proposed tax levied on each for the park would be $300,a majority vote will:

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Since the perceived marginal benefit of the proposed park is less than the tax levied on each person, the majority vote will likely defeat the project. This means that resources will be underallocated to the park, as it will not be built even though it would provide a positive net benefit to society. This is the case because the cost of the project (the tax) exceeds the perceived marginal benefit of the individual citizens.

Suppose That Steve and Susie Each Perceives $200 of Marginal