A public good that would benefit Karen,Tammy,and Max has a one time installation cost of $900.These three voters must approve any tax plan by simple majority and all three will cast a vote. $$\begin{array} { | c | c | c | }
\hline \text { VOTER } & \text { RESERVATION PRICE } & \text { INCOME } \
\hline \text { Kris } & \$ 100 & \$ 1000 \
\hline \text { Taylor } & \$ 200 & \$ 5000 \
\hline \text { Max } & \$ 700 & \$ 6000 \
\hline
\end{array}$$
The net social benefit of providing the public good is

Question

A public good that would benefit Karen,Tammy,and Max has a one time installation cost of $900.These three voters must approve any tax plan by simple majority and all three will cast a vote. $$\begin{array} { | c | c | c | } 
\hline \text { VOTER } & \text { RESERVATION PRICE } & \text { INCOME } \
\hline \text { Kris } & \$ 100 & \$ 1000 \
\hline \text { Taylor } & \$ 200 & \$ 5000 \
\hline \text { Max } & \$ 700 & \$ 6000 \
\hline
\end{array}$$
The net social benefit of providing the public good is

Quizplus · Accepted Answer

The net social benefit is the sum of the reservation prices minus the cost of the public good. In this case, the sum of the reservation prices is $100 + $200 + $700 = $1,000. The cost of the public good is $900. Therefore, the net social benefit is $1,000 - $900 = $100.

A Public Good That Would Benefit Karen,Tammy,and Max Has a One