Think about two public goods—public schools and food assistance for needy families. Consider the implications of the Tiebout model. Which of the goods is more efficiently provided locally? Which is more efficiently provided centrally? Explain.
Answer to relevant QuestionsDescribe the externalities argument for distributing money from one community to another. Provide an example of this kind of redistribution based on externalities. The state of Delaland has two types of town. Type A towns are well-to-do, and type Browns are much poorer. Being wealthier, type A towns have more resources to spend on education; their demand curve for education is Q = 100 ...Empirical evidence suggests that better-educated adults donate more to charity than do less-educated adults with similar income levels. Why might this evidence justify public subsidization of education? What potential biases ...Epple and Romano (2003) described theoretical evidence that school vouchers will lead to “cream-skimming,” where private schools will pick off the better students and leave public schools with lower-ability average ...Why might government provision of insurance lead to a larger number of insurance claims than private provision of insurance would?
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