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Assume there are four people in a city. Person A owns nothing, person B owns a chicken shack worth $7,000, person C owns a plot of land worth $233,000 and person D owns a house worth $960,000. They want to finance a public childrenâs zoo, a local public good. The zoo will cost $18,000 and should be financed by a property tax with equal tax rates per property value. Calculate the tax rate (in %) for the following cases

a. all four people live in the city

b. there is a city of four B-like people

c. there is a city of four C-like people

d. there is a city of four D-like people

e. there is a city of only one A, one B and one C (D has left).

Business Economics, Economics

  • Category:- Business Economics
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