Public Finance (The McGraw-Hill Series in Economics)
10th Edition
ISBN: 9780078021688
Author: Harvey S Rosen, Ted Gayer
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 6, Problem 3DQ
Three voters, A, B, and C, will decide by majority rule whether to pass bills on issues X and Y. Each of the two issues will be voted on separately. The change in net benefits (in dollars) that would result from passage of each bill is as follows:
- a. Which issues (if any) would pass if decided by majority rule? Is this the efficient out-come?
- b. Which issues (if any) would pass if logrolling were allowed? Would logrolling improve efficiency? Would it result in the efficient outcome?
- c. Suppose that it were legal for one voter to pay another to vote a certain way. Would allowing such side payments improve efficiency from part b? Would it result in the efficient outcome?
- d. What amount of side payments would take place if paying for votes were allowed?
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A community public works project will cost $92,000 and will benefit five different individuals.
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C) Building permits to build a roof in a house
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Chapter 6 Solutions
Public Finance (The McGraw-Hill Series in Economics)
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