In a Lindahl equilibrium: A. no one could be made better off by reducing his or...
In a Lindahl equilibrium:
A. no one could be made better off by reducing his or her tax burden, all things equal.
B. everyone is willing to pay the taxes to receive the benefits.
C. most but not all individuals are happy to pay their taxes to receive the benefits.
D. the government must subsidize the project by using nontax financing schemes.
Homework Answers
Ans.- (B)
Lindahl equilibrium is the state of an economy in which the optimal quantity of a public goods is produced and the cost of public goods is fairly shared among everyone according to their marginal benefit . Therefore, Everyone pays the tax to receive the benefit of the public good.
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In a Lindahl equilibrium:
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