An investment bank is a financial institution that finances federal budget deficits at very low interest rates

Suppose three neighbors must vote on the installation of a traffic light that costs $210. The cost of the light will be shared by all three

Voter A values the light at $50; voter B values the light at $50; and voter C (who drives the most) values the light at $200. If the voting rule is that the majority wins, does the light get purchased? Is it efficient to purchase the light?

According to most economists, which one of the following would be the best public policy?

A. Require businesses to reduce pollution by a level prescribed by the government. B. Zero tolerance for pollution. C. Rely on private enterprise to reduce pollution as it is ultimately in its best interest. D. Provide business firms with incentives to curb their pollution.