Suppose there are three individuals living in a community. Their demands for a public good are described below and they have decided to vote on the level of public good to be provided. The $36 MC is divided equally so each faces a tax price of $12. Would the level of the public good provided via a simple majority vote change if the community became more polarized than before? For example, suppose Doug suddenly develops a demand for the public good MB = 120 - 6Q and Adam develops a demand P = 10 - Q. Does the outcome of simple majority voting after polarization lead te %3! higher, lower, or the same level of public good than before? Doug: MB = 60 - 3Q Carl: MB = 40 - 2Q %3D Adam: MB = 20 - Q %3! O Higher O Lower O Same

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter19: Externalities And Public Goods
Section: Chapter Questions
Problem 19.7P
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Suppose there are three individuals living in a community. Their demands for a public good are
described below and they have decided to vote on the level of public good to be provided. The $36
MC is divided equally so each faces a tax price of $12. Would the level of the public good provided
via a simple majority vote change if the community became more polarized than before? For
example, suppose Doug suddenly develops a demand for the public good MB = 120 - 6Q and Adam
develops a demand P = 10 - Q. Does the outcome of simple majority voting after polarization lead to
higher, lower, or the same level of public good than before?
Doug: MB = 60 - 3Q
%3D
Carl: MB = 40 - 2Q
%3D
Adam: MB = 20 - Q
%3D
O Higher
O Lower
O Same
Transcribed Image Text:Suppose there are three individuals living in a community. Their demands for a public good are described below and they have decided to vote on the level of public good to be provided. The $36 MC is divided equally so each faces a tax price of $12. Would the level of the public good provided via a simple majority vote change if the community became more polarized than before? For example, suppose Doug suddenly develops a demand for the public good MB = 120 - 6Q and Adam develops a demand P = 10 - Q. Does the outcome of simple majority voting after polarization lead to higher, lower, or the same level of public good than before? Doug: MB = 60 - 3Q %3D Carl: MB = 40 - 2Q %3D Adam: MB = 20 - Q %3D O Higher O Lower O Same
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