Question: To determine the right amount of public good to provide
To determine the right amount of public good to provide, the government of West Essex decides to survey its residents about how much they value the good. It will then finance the public good provision by taxes on residents. Describe a tax system that would lead residents to underreport their valuations. Describe an alternative system that could lead residents to over report their valuations.
Answer to relevant QuestionsWhy is it difficult to empirically determine the degree to which government spending crowds out private provision of public goods? The town of Musicville has two residents: Bach and Mozart. The town currently fund sits free outdoor concert series solely from the individual contributions of these residents. Each of the two residents has a utility ...A city government is considering building a new system of lighted bike paths. A council or supporting their construction lists the following as potential benefits of the paths: (1) more enjoyable bike rides for current and ...Jellystone National Park is located 10 minutes away from city A and 20 minutes away from city B. Cities A and B have 200,000 inhabitants each, and residents in both cities have the same income and preferences for national ...When energy companies wish to raise the rates they charge to their customers, they must first argue their case at a public hearing before a regulatory body. How does the free rider problem explain why energy companies are ...
Post your question