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1. (24p) Municipalities in the Macondo metropolitan region share some common infrastructure. All costs are shared equally between the municipalities, each of which has one

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1. (24p) Municipalities in the Macondo metropolitan region share some common infrastructure. All costs are shared equally between the municipalities, each of which has one vote in any investment decision. There are three separate projects under consideration. Total cost and municipal gross benefits are depicted below in m. (a) Which investment projects would be efficient for the region? (b) Suppose each investment decision is made one at a time. Which projects could get done under a majority rule? What about under a unanimity rule? (c) Suppose it is possible to vote over combinations of projects. Find a combination that could pass a majority vote, even though it includes a project that could not pass if all projects are voted on separately. Is this "log-rolling" beneficial for economic efficiency

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