Imagine there are a couple of proposals related to building baseball stadia in Pennsylvania. The state will pay for the entire arena and there are 3 equal areas in terms of taxes and political power. The proposals are to build the stadia in Philadelphia and Pittsburgh. The benefits to the regions are in the following table.
|
Regions
|
Benefit from Philadelphia stadium
|
Benefit from Pittsburgh stadium
|
|
Philadelphia
|
15
|
-12
|
|
Pittsburgh
|
-5
|
15
|
|
Central PA
|
-5
|
-12
|
a) Will either proposal pass if just decided on its own? Explain.
b) Will a proposal combining both arenas pass? Explain.
c) Does the combining of the two plans lead to an increase in social well-being? Explain