Business
Business, 16.10.2020 14:01, TropicalFan

The Senate, the legislature of the fictional country of Romange, is considering legislation that will generate benefits of $30 million and costs of $34 million. For perspective, Romange's population is 50 million. Passing the legislation is , and if everyone in Romange shared equally in both its benefits and its costs, the Senate will vote the legislation. If the costs of the legislation are concentrated among a few people instead of widespread among the population, those people will be willing to spend up to lobbying the Senate against the legislation. (Note: Assume that the benefits are widespread; therefore, you can ignore them in the calculations of the few who experience the costs.) The more widely spread are the benefits of the legislation, the is the likelihood of lobbying for the legislation by those who will incur its benefits. Suppose that, as before, the costs of the legislation are concentrated among a small group, but the benefits of the legislation are concentrated among another small group, and the Senate is responsive to lobbying. The people who will benefit from the legislation will be willing to spend on lobbying up to , in which case the Senate will likely vote the legislation.

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