Question: Suppose that there are 1,000 voters in your city. A total of 400 are willing to pay up to $25 each for the construction of a park, and the other 600 are willing to pay only $10. The construction of the park will cost 8 1 2,000. Someone proposes a vote on whether to tax each citizen 8 1 2 in order to finance the park.

Part A: What will be the result according to the median voter model? Is this result socially efficient? Explain.


Part B: What if instead of being willing to pay up to $25 each, the 400 residents were willing to pay up to $50 each?

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