CONNECT F/MICROECONOMICS
21st Edition
ISBN: 2810022151240
Author: McConnell
Publisher: MCG
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Question
Chapter 5.A, Problem 1ARQ
To determine
Paradox of voting.
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Let's see whether quadratic voting can avoid the paradox of voting that arose in Table 5.3 when using 1p1v in a series of paired-choice
majority votes. To reexamine this situation using quadratic voting, the table below presents the maximum willingness to pay of Garcia,
Johnson, and Lee for each of the three public goods. Notice that each person's numbers for willingness to pay match her or his
ordering of preferences (1st choice, 2nd choice, 3rd choice) presented in Table 5.3. Thus, Garcia is willing to spend more on her first
choice of national defense ($400) than on her second choice of a road ($100) or her third choice of a weather warning system ($0).
TABLE 5.3 Paradox of Voting
Preferences
Public Good
Garcia
Johnson
Lee
National defense
1st choice
3d cholce
2d cholce
Road
2d cholce
1st choice
3d cholce
Weather warning system
3d choice
2d choice
1st choice
Election
Voting Outcomes: Winner
1. National defense vs. road
National defense (preferred by Garcia and Lee)
2. Road vs.…
1.
Chapter 4
Market Failure Caused by Externalities
Page
94 Problem 1
Draw a supply and demand graph and
identify the areas of consumer surplus and
producer surplus. Given the demand curve,
how will an increase in supply affect the
amount of surplus shown in your diagram ?
Explain. LO4.1 (Differentiate between
demand-side market failures and supply-side
market failures.
Consider the town of Springfield with only three residents, Sophia, Amber, and Cedric. The three residents
are trying to determine how large, in acres, they should build the public park. The following table shows each
resident's willingness to pay for each acre of the park.
Acres
1
2
3
4
5
6
7
Sophia
0 acres
O1 acre
2 acres
10
8
6
3
1
O3 acres
0
Willingness to Pay (Dollars)
Amber
Refer to Table 11-1. Suppose the cost to build the park is $24 per acre and that the residents have agreed to
split the cost of building the park equally. If the residents vote to determine the size of park to build, basing
their decision solely on their own willingness to pay (and trying to maximize their own surplus), what is the
largest park size for which the majority of residents would vote "yes?"
24
18
14
8
6
4
2
Cedric
6
5
4
3
2
1
0
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