Suppose 100 townspeople value a statue of the local hero at $1 each, and construction of the statue would cost $90. Which of the following is TRUE?
A) It would be efficient to build the statue, but it may not be built because some of the townspeople who value the statue will not contribute to its construction.
B) It would be efficient to build the statue and it will be built because at least ninety of the townspeople will contribute to its construction.
C) The statue will not be built because it is not efficient to build a statue that costs $90 if the townspeople value it at only $1.
D) The statue will not be built because the local government does not have the power to tax only those who value it.

Question

Quizplus · Accepted Answer

While building the statue would be efficient in terms of the value the townspeople place on it, there is no guarantee that all or even enough of them will contribute to its construction. Therefore, it may not be built, even if it is efficient to do so.

Suppose 100 Townspeople Value a Statue of the Local Hero