The small city of Pleasantville is considering building a public swimming pool that costs $1,000. Each resident's marginal benefit of the swimming pool is shown below. It takes a 4/5 majority to pass any tax measure, and all residents must vote. $$\begin{array} { | c | c | }
\hline \text { Voter } & \text { Marginal Benefit } \
\hline \text { Kyle } & \$ 420 \
\hline \text { Dylan } & \$ 360 \
\hline \text { Fran } & \$ 350 \
\hline \text { Ronnie } & \$ 190 \
\hline \text { Sam } & \$ 170 \
\hline
\end{array}$$ Building the swimming pool would ______ total economic surplus because ______.

Question

The small city of Pleasantville is considering building a public swimming pool that costs $1,000. Each resident's marginal benefit of the swimming pool is shown below. It takes a 4/5 majority to pass any tax measure, and all residents must vote. $$\begin{array} { | c | c | } 
\hline \text { Voter } & \text { Marginal Benefit } \
\hline \text { Kyle } & \$ 420 \
\hline \text { Dylan } & \$ 360 \
\hline \text { Fran } & \$ 350 \
\hline \text { Ronnie } & \$ 190 \
\hline \text { Sam } & \$ 170 \
\hline
\end{array}$$ Building the swimming pool would ______ total economic surplus because ______.

Quizplus · Accepted Answer

The total economic surplus would increase if the swimming pool is built because the total social benefit is greater than the cost of building the pool. The sum of the marginal benefits of all voters is $1490, which is greater than the cost of building the pool ($1000). Therefore, the pool would provide a net positive benefit to the community. Since there is no information on taxes being collected to build the pool or the cost being passed on to users from other towns, options B and D cannot be chosen. Option A is incorrect because the total social benefit exceeds the cost.

The Small City of Pleasantville Is Considering Building a Public