6. Distribution of benefits and costs The Parliament, the legislature of the fictional country of Verben, is considering legislation that will generate benefits of $15 million and costs of $11 million. For perspective, Verben's population is 60 million. Passing the legislation is efficient , and if everyone in Verben shares equally in both its benefits and its costs, the Parliament will vote for the legislation. If the benefits of the legislation are concentrated among a few people instead of widespread among the population, those who benefit will be willing to spend up to $15 million lobbying the Parliament for the legislation. (Note: Assume that the costs are widespread; therefore, you can ignore them in the calculations of the few who experience the benefits.) The less widely spread are the costs of the legislation, the lower is the likelihood of lobbying against the legislation by those who will incur its costs. Suppose that, as before, the benefits of the legislation are concentrated among a small group, the costs are very widespread, and the Parliament is responsive to lobbying. The likely amount spent on lobbying against the legislation is $11 million in which case the Parliament will likely vote against the legislation.
6. Distribution of benefits and costs The Parliament, the legislature of the fictional country of Verben, is considering legislation that will generate benefits of $15 million and costs of $11 million. For perspective, Verben's population is 60 million. Passing the legislation is efficient , and if everyone in Verben shares equally in both its benefits and its costs, the Parliament will vote for the legislation. If the benefits of the legislation are concentrated among a few people instead of widespread among the population, those who benefit will be willing to spend up to $15 million lobbying the Parliament for the legislation. (Note: Assume that the costs are widespread; therefore, you can ignore them in the calculations of the few who experience the benefits.) The less widely spread are the costs of the legislation, the lower is the likelihood of lobbying against the legislation by those who will incur its costs. Suppose that, as before, the benefits of the legislation are concentrated among a small group, the costs are very widespread, and the Parliament is responsive to lobbying. The likely amount spent on lobbying against the legislation is $11 million in which case the Parliament will likely vote against the legislation.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:6. Distribution of benefits and costs
The Parliament, the legislature of the fictional country of Verben, is considering legislation that will generate benefits of $15 million and costs of $11
million. For perspective, Verben's population is 60 million.
Passing the legislation is efficient , and if everyone in Verben shares equally in both its benefits and its costs, the Parliament will vote
the legislation.
for
If the benefits of the legislation are concentrated among a few people instead of widespread among the population, those who benefit will be willing to
spend up to $15 million lobbying the Parliament for the legislation. (Note: Assume that the costs are widespread; therefore, you can ignore
them in the calculations of the few who experience the benefits.)
The less widely spread are the costs of the legislation, the lower is the likelihood of lobbying against the legislation by those who will incur its
costs.
Suppose that, as before, the benefits of the legislation are concentrated among a small group, the costs are very widespread, and the Parliament is
responsive to lobbying. The likely amount spent on lobbying against the legislation is $11 million , in which case the Parliament will likely vote
against the legislation.
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