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Three farmers, Albert, Bob, and Charlene, are contemplating building access roads to their farms. The road to Albert's farm is worth $10,000 to him and

Three farmers, Albert, Bob, and Charlene, are contemplating building access roads to their farms. The road to Albert's farm is worth $10,000 to him and the road to Bob's farm is worth $12,000 to him. Charlene's farm is on the main road, which already exists, and so an extra road is of no value to her. This is summarized in the table below. The cost of building each access road is $9000 and under the current tax rules each of the three farmers would have to pay a third of the cost per road built. A road will be built if it receives a majority of votes.

Answer YES or NO to the following questions.

1) Is it efficient to build Alberts farm?

2)Will the democratic process lead to the road to Alberts farm being built

3) Is it efficient to build the road to Bobs farm

4)Will the democratic process lead to the road to Bobs farm being built

5) Is it efficient to build the road to Charlenes farm?

6) Will the democratic process lead to the road to Charlenes farm being built

image text in transcribed
Build Road to Benefit to Albert Benefit to Bob Benefit to Charlene Albert's Farm $10,000 $0 $0 Bob's Farm $0 $12,000 $0 Charlene's Farm $0 $0 $0

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