Problems Chapter 10 2. Some have argued that diversity in communities and schools leads to positive externalities. What implications does this view have for the efficiency of a Tiebout equilibrium? What implications does it have for government policy? 3. Think about two public goodspublic 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. 4. Describe, using the externalities argument, how investment in one community can distribute money to another. Provide an example of this kind of redistribution based on externalities. 5. The state of Minnegan is considering two alternative methods of funding local road construction, matching grants and block grants. In the case of the matching grant, Minnegan will spend 51 for every $1 spent by localities. a. What is the price of an additional dollar of local spending in each case? b. Which of the two methods do you think would lead to higher levels of local spending on roads? Explain your