6. You are the mayor of a town with 20,000 residents. The head of your economic development agency recently conducted a survey in which the 20,000 residents said that a small public library in the center of town would be worth $40 to each of them. The cost to build the library is $500,000. Which of the following is the most efficient option?

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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6. You are the mayor of a town with 20,000 residents. The head
of your economic development agency recently conducted a
survey in which the 20,000 residents said that a small public
library in the center of town would be worth $40 to each of
them. The cost to build the library is $500,000. Which of the
following is the most efficient option?
a. The library should be built and paid for with donations
collected from residents, as these donations should more than
cover the cost of the library.
b. The library should be built and paid for by the wealthiest ten
percent of the residents.
c. The library should be built and paid for by the town
government and paid for with a tax on the residents because all
residents would benefit from it but some residents would not
donate if they were asked.
d. The library should not be built.
Transcribed Image Text:6. You are the mayor of a town with 20,000 residents. The head of your economic development agency recently conducted a survey in which the 20,000 residents said that a small public library in the center of town would be worth $40 to each of them. The cost to build the library is $500,000. Which of the following is the most efficient option? a. The library should be built and paid for with donations collected from residents, as these donations should more than cover the cost of the library. b. The library should be built and paid for by the wealthiest ten percent of the residents. c. The library should be built and paid for by the town government and paid for with a tax on the residents because all residents would benefit from it but some residents would not donate if they were asked. d. The library should not be built.
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