Van, Amy, and Tim are the only inhabitants of the small island of Brite. Unfortunately, the island lacks a lighthouse to guide visitors. However, the inhabitants can import a public lighthouse from a neighboring island at a cost of $18,900. Once purchased, nothing could prevent any of the island's inhabitants from using the lighthouse when traveling to and from the island. The following table shows each individual's benefit from importing the lighthouse. Individual Benefit from a Lighthouse $8,000 $6,200 $5,500 Van Amy Tim The total benefit from the lighthouse to Brite is Therefore, it efficient for Van, Amy, and Tim to purchase the lighthouse. If the community (Van, Amy, and Tim, in this case) voted on whether to divide up the cost of the lighthouse into equal shares of $6,300 per person, of the community would vote for this option. Tim tries unsuccessfully to persuade Van and Amy that the island needs a missile defense system. During their discussion, Tim and Van get together and introduce a new vote. The new vote bundles two proposals: the missile defense system and the proposal to divide the cost of the lighthouse into equal shares. Amy still votes no, but Van and Tim vote yes due to the agree e during their earlier discussion to approve the missile and lighthouse proposals Screenshot simultaneously. This is an example of
Van, Amy, and Tim are the only inhabitants of the small island of Brite. Unfortunately, the island lacks a lighthouse to guide visitors. However, the inhabitants can import a public lighthouse from a neighboring island at a cost of $18,900. Once purchased, nothing could prevent any of the island's inhabitants from using the lighthouse when traveling to and from the island. The following table shows each individual's benefit from importing the lighthouse. Individual Benefit from a Lighthouse $8,000 $6,200 $5,500 Van Amy Tim The total benefit from the lighthouse to Brite is Therefore, it efficient for Van, Amy, and Tim to purchase the lighthouse. If the community (Van, Amy, and Tim, in this case) voted on whether to divide up the cost of the lighthouse into equal shares of $6,300 per person, of the community would vote for this option. Tim tries unsuccessfully to persuade Van and Amy that the island needs a missile defense system. During their discussion, Tim and Van get together and introduce a new vote. The new vote bundles two proposals: the missile defense system and the proposal to divide the cost of the lighthouse into equal shares. Amy still votes no, but Van and Tim vote yes due to the agree e during their earlier discussion to approve the missile and lighthouse proposals Screenshot simultaneously. This is an example of
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Van, Amy, and Tim are the only inhabitants of the small island of Brite. Unfortunately, the island lacks a lighthouse to guide visitors. However, the
inhabitants can import a public lighthouse from a neighboring island at a cost of $18,900. Once purchased, nothing could prevent any of the island's
inhabitants from using the lighthouse when traveling to and from the island. The following table shows each individual's benefit from importing the
lighthouse.
Individual Benefit from a Lighthouse
Van
$8,000
Amy
$6,200
Tim
$5,500
The total benefit from the lighthouse to Brite is
Therefore, it
efficient for Van, Amy, and Tim to purchase the lighthouse.
If the community (Van, Amy, and Tim, in this case) voted on whether to divide up the cost of the lighthouse into equal shares of $6,300 per person,
of the community would vote for this option.
Tim tries unsuccessfully to persuade Van and Amy that the island needs a missile defense system. During their discussion, Tim and Van get together
and introduce a new vote.
The new vote bundles two proposals: the missile defense system and the proposal to divide the cost of the lighthouse into equal shares. Amy still
votes no, but Van and Tim vote yes due to the agree
e during their earlier discussion to approve the missile and lighthouse proposals
Screenshot
simultaneously. This is an example of
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