Answer the question on the basis of this table showing the marginal benefit that a particular public project will provide to each of the three members of a community.No vote trading is allowed. $$\begin{array} { c c c }
\text { Voter } & & \text { Marginal Benefit } \
\hline
\text { Xavier } & & \$ 500 \
\text { Yoho } & & 200 \
\text { Zest } & & 2,000
\end{array}$$ If the tax cost of this proposed project is $300 per person,a majority vote will:

Question

Answer the question on the basis of this table showing the marginal benefit that a particular public project will provide to each of the three members of a community.No vote trading is allowed. $$\begin{array} { c c c } 
\text { Voter } & & \text { Marginal Benefit } \
\hline
\text { Xavier } & & \$ 500 \
\text { Yoho } & & 200 \
\text { Zest } & & 2,000
\end{array}$$ If the tax cost of this proposed project is $300 per person,a majority vote will:

Quizplus · Accepted Answer

The total marginal benefit of the project is $2,700, which is greater than the total tax cost of $900 (300 * 3). However, if the project is passed, each voter will have to pay $300 in taxes, but only receive marginal benefits of $500, $200, and $2,000 respectively. This means that resources will be allocated to the project, but they will be underallocated because the tax cost is greater than the marginal benefit for two out of three voters. Therefore, choice C is the best answer.

Answer the Question on the Basis of This Table Showing