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Two plans lead to an increase in social well-being

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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

Reference no: EM131051087

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