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# Benefits of Social Programs

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A community-based public works project costing \$55,000 will benefit 5 separate individuals as shown below:

Individual #, Benefit (\$), Cost Share (\$)

1\$1,000 \$1,500

2 \$5,000 \$4,500
3 \$4,000 \$5,000
4 \$20,000 \$18,000
5 \$25,000 \$25,500

In an Excel spreadsheet, show whether this project is economically feasible. Would a majority approve this project (explain)? Does the project meet Pareto efficiency criterion (explain)? Revise the cost shares to meet Pareto criterion and get the referendum passed by a majority vote.

#### Solution Preview

See excel attached.

source: http://www.princeton.edu/~achaney/tmve/wiki100k/docs/Pareto_efficiency.html

1. The overall benefit is \$500 which is not a great ...

#### Solution Summary

A sentence explains each and an excel chart shows the initial benefits vs. cost and then the optimized one.

\$2.19