Question

Answer the question on the basis of the following table that shows the total costs and total benefits facing a city of five different potential baseball stadiums of increasing size. All figures are in millions of dollars. B Stadium Total Cost A $80 100 130 165 220 Total Benefit $140 200 250 290 300 Applying the median-voter model and assuming that there are equal numbers of voters supporting each stadium, we would expect stadium C to be built, which would be the most socially efficient outcome. stadium C to be built, but this would not be the most socially efficient outcome. stadium D to be built because it produces the most socially efficient outcome. no stadium to be built, because of political gridlock. O

Answer 1

Answer - Option B

Stadium C to be built , but this would not be the socially optimal outcome

In the median voter model , the voter may not choose the alternative which may be the best with respect to the others. The others would have chosen stadium D as it provides the maximum benefit. But in median voter model , stadium C will be chosen.