Use the figure below to answer the following question(s).
Figure 6-1

Figure 6-1 illustrates the four possibilities of the distribution of costs and benefits among voters for a government project. For which type would the government most likely fail to undertake many projects that would be considered efficient or productive (in other words, do too few of them relative to economic efficiency)?

Question

Use the figure below to answer the following question(s).
Figure 6-1

Figure 6-1 illustrates the four possibilities of the distribution of costs and benefits among voters for a government project. For which type would the government most likely fail to undertake many projects that would be considered efficient or productive (in other words, do too few of them relative to economic efficiency)?

Quizplus · Accepted Answer

Type C represents a situation where the benefits are concentrated on a relatively small group of voters, while the costs are spread across a large group of voters. In such a scenario, the small group of beneficiaries may have a strong incentive to lobby for the project, while the large group of cost-bearers may have little incentive to oppose it. This could lead to the government undertaking projects that are inefficient or unproductive, as they mainly benefit a small group at the expense of many others. As a result, the government may fail to undertake many projects that would be considered efficient or productive, leading to under-provision of public goods or services. Therefore, type C is the correct choice.

Use the Figure Below to Answer the Following Question(s)