A neighboring community of 3 households also finances school quality through property taxes and selects school quality through majority voting. In the second community, the marginal benefits are:

MB1 = 300 – S
MB2 = 200 – S
MB3= 100 – S

The marginal cost of increasing school quality is 300 per unit. Whatever school quality is chosen for the school will apply to all pupils.

Property values are distributed: Value 1 = 300,000, Value 2 = 200,000, Value 3 = 100,000.
c. What is the majority voting choice in this community?
d. The marginal benefit/inverse demands in the second community are higher because incomes are higher in that community. How do your results in parts b. and c. relate to the income stratification features of public school systems?

Answer rating: 100% (QA)

A neighbouring community of 3 households also finances school quality through property taxes and selects school quality through majority voting In the second community the marginal benefits are MB1 30... View the full answer