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APPENDIX DISCUSSION QUESTIONS
1. Explain how affirmative and negative majority votes can sometimes lead to inefficient
allocations of resources to public goods. Is this problem likely to be greater under a
benefits‐received or an ability‐to‐pay tax system? Use the information in Figures 1a and 1b to
show how society might be better off if Adams were allowed to buy votes. LO3
Answer: The problem arises because the one-person one-vote rule does not allow voters
to register the strength of their preferences. In the text’s example, three people—Adams,
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2. “Majority voting ensures that government will produce only those public goods for which
benefits exceed costs.” Why? LO3
Answer: A number of government failures and voting paradoxes can lead to
3. “The problem with our democratic institutions is that they don’t correctly reflect the will of the
people! If the people-rather than self-interested politicians or lobbyists-had control, we wouldn’t
have to worry about government taking actions that don’t maximize allocative and productive
efficiency.” Critique. LO3
Answer: Due to voter failure and the problem that economically inefficient policies are
APPENDIX REVIEW QUESTIONS
1. Explain the paradox of voting through reference to the accompanying table, which shows the
ranking of three public goods by voters Jay, Dave, and Conan: LO3
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APPENDIX PROBLEMS
1. Look back at Figures 1a and 1b, which show the costs and benefits to voters Adams, Benson,
and Conrad of two different public goods that the government will produce if a majority of
Adams, Benson, and Conrad support them. Suppose that Adams, Benson, and Conrad have
decided to have one single vote at which the funding for both of those public goods will be
decided simultaneously. LO3
a. Given the $300 cost per person of each public good, what are Adams’ net benefits for each
public good individually and for the two combined? Will he want to vote yes or no on the
proposal to fund both projects simultaneously?
b. What are Conrad’s net benefits for each public good individually and for the two combined?
Will he want to vote yes or no on the proposal to fund both projects simultaneously?
c. What are Benson’s net benefits for each public good individually and for the two combined?
Will he want to vote yes or no on the proposal to fund both projects simultaneously-or will he
be indifferent?
d. Who is the median voter here? Who will the two other voters be attempting to persuade?
