Question

For the next four questions, consider the following table of a city consisting of five districts that is debating where to build a new stadium and a free public wifi network. The table shows the benefit (positive) or harm (negative) in each city district from doing these projects.

The socially best outcome (highest total benefit to the whole city) is to

Question 11 options:

	build the stadium but not the wifi network.
	build the wifi network but not the stadium.
	build both the wifi network and the stadium.
	build neither the wifi network nor the stadium.

If there is no vote trading and the representative for each district votes on each project separately to maximize benefit to his or her own district, then

Question 12 options:

	neither the wifi network nor the stadium will be built.
	only the wifi network will be built.
	only the stadium will be built.
	both the wifi network and the stadium will be built

Suppose that both proposals are voted on as a package (a representative can vote yes or no to the package of both proposals, but not yes or no on each project individually). Representatives vote to maximize the benefit to their own districts. The outcome of this voting will be to

Question 13 options:

	build the stadium but not the wifi network.
	build neither the wi-fi network nor the stadium.
	build the wi-fi network but not the stadium.
	build both the stadium and the wifi network.

Suppose that the district 4 will have a harm of -50 from the wi-fi network instead of a benefit of 300. In this case, the representative for district 3 will vote against the wi-fi network when projects are voted on individually (so neither one gets built). Now suppose that the district 4 representative offers to vote yes on the wi-fi network if the representative from district 2 votes yes on the stadium. Which of the following is correct?

Question 14 options:

	None of the other answers is correct.
	The representative from district 2 will agree to the trade, but neither project will get built.
	The representative from district 2 will agree to the trade, so both will get built.
	The representative from district 2 will never agree because the stadium harms district 2, so neither project gets built.

Answer 1

Answer (11) build both the wifi network and the stadium.

Explanation- It is quite natural that when the representatives will be asked what should be build in their district then they will agree on building both stadium as well as wifi network as it is the highest outcome in this case and it will benefit more than any other outcome.

Answer (12) neither the wifi network nor the stadium will be built.

Explanation- When representatives from each district will vote separately on each project then it is very less likely that any of the projects will get a majority as some representatives will be in favour of building stadium however some will be in favour of bulidng wifi network.

Answer (13) build both the stadium and the wifi network

Explanation- The maximum benefit will be received by districts when both stadium, as well as wifi network, will be built and hence the representatives will vote for building both ithe stadium and the wifi network.

Answer (14) None of the other answers is correct.

Explanation- As the stance of representative of district 1 and district 5 is not provided hence the last outcome of voting remains uncertain and so no option is correct.