Suppose that Katie and Kelly each expect to receive $500 worth of marginal benefits from a proposed new recreation center, whereas Kerry expects to receive only $100 worth. If the proposed tax levied on each for the center would be $600, a majority vote will

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Given that Katie and Kelly each value the project at $500 and Kerry values it at $100, the total perceived value is $1100. However, since each is expected to pay $600, for Katie and Kelly the cost exceeds the benefit, and for Kerry, the cost far exceeds the benefit. Therefore, all three would likely vote against the project, leading to its defeat and no resources being allocated to it.

Suppose That Katie and Kelly Each Expect to Receive $500