Suppose That Katie and Kelly Each Expect to Receive $500

Multiple Choice

Suppose that Katie and Kelly each expect to receive $500 worth of marginal benefits from a proposed new recreation center, whereas Kerry expects to receive only $100 worth. If the proposed tax levied on each for the
Center would be $400, a majority vote will

A) defeat this project and resources will be underallocated to it.
B) pass this project and resources will be efficiently allocated.
C) pass this project and resources will be underallocated to it.
D) pass this project and resources will be overallocated to it.