Study Questions

2.4 A.) Gymnastics Center B.) Swimming Pool because Total MB for swimming pool is greater then gymnastics center C.) Swimming Pool because Total MB of swimming pool is greater then gymnastics center and MC is the same for both; hence the Social surplus is greater for swimming pool. D.) Cumulative because the votes are proportionally and equally spread out according to voter’s preferences. 2.6 A.) $0, because the loss in consumer surplus is still smaller then if proposal was declined and voters accept reversion budget. Voters would be willing to accept any amount up too $1,000 but it is not guaranteed B.) Decrease so voters have a greater incentive to vote for bureaucrat’s larger budget. C.)Larger, Because of the curve, loss in consumer surplus is less then the level in 2.6a and bureaucrat can propose a large amount.