. To Charlie, the marginal benefit (MB) of national defense is MB = 4,500 90Q,...

 

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. To Charlie, the marginal benefit (MB) of national defense is MB = 4,500 – 90Q, where Q measures units of national defense. Sally's marginal benefit is MB = 3,000 – 60Q. The marginal cost of providing national defense is constant and equal to $2,700. Calculate the efficient quantity of national defense. Graph aggregate MB and MC to illustrate the efficient quantity of national defense (label functions and include all relevant values in the graph). Assume policymakers are able to choose the efficient level of national defense because they know each voter's marginal benefit function. If tax shares are set to force each person to pay exactly what they think national defense is worth at the optimal level, what is Charlie's tax share and what is Sally's tax share? . To Charlie, the marginal benefit (MB) of national defense is MB = 4,500 – 90Q, where Q measures units of national defense. Sally's marginal benefit is MB = 3,000 – 60Q. The marginal cost of providing national defense is constant and equal to $2,700. Calculate the efficient quantity of national defense. Graph aggregate MB and MC to illustrate the efficient quantity of national defense (label functions and include all relevant values in the graph). Assume policymakers are able to choose the efficient level of national defense because they know each voter's marginal benefit function. If tax shares are set to force each person to pay exactly what they think national defense is worth at the optimal level, what is Charlie's tax share and what is Sally's tax share?

Answer rating: 100% (QA)

MBCharlie 4500 900 MBsally 3000 600 MC 2700 The efficient q... View the full answer