Question

Demand for Local Public Goods (2 pts) Assume there are three people in a city. Person A owns one parking lot worth $2,000, person B owns a lot worth $1,000, person owns a small plot of land worth $9,000. They want to finance a garden, a local public good. The garden will cost $3000 and should be financed by a property tax with equal tax rates per property value. What is the tax rate (in %) if all three people (A, B, and live in the city 2.5% none of the above Demand for Local Public Goods (2 pts) Assume there are three people in a city. Person A owns one parking lot worth $2,000, person B owns a lot worth $1,000 person owns a small plot of land worth $9,000. They want to finance a garden, a local public good. The garden will cost $3000 and should be financed by a property tax with equal tax rates per property value. What is the tax rate (in %) if there are only three A-like people in the city 100% 25% SON none of the above Cruising for Parking (4 pts) UCLA transportation economist Donald Shoup developed a formula to explain the rational masimum cruising time for parking. Refer to this formula and assume the following values. Desired parking time: 12 hours, off-curb parking fee: $4h, curb-parking fee: $2/h, fuel cost per hour cruising: $2h, number of people in car: 2. time value per person: $9/h. The resulting maximum cruising time is 72 minutes

Answer 1

1) Total value of property of all 3 individuals is given as $1000+2000+9000=$12000.

The price of park is $3000 which is 25% or 1/4th of $12000.

So the tax on property would be 25%.

And the tax collection would be as follows

25% of 2000=$500

25% of $1000=$250

25% of 9000= 2250

Adding them we get 2250+250+500=$3000.

So answer would be E) none of these

2) If there are 3 A like people,it means the value of property would change.

The new value of property would be

$2000*3=$6000.

Out of this 6000, $3000 would be property tax which would be 50% of the property value.

So the answer would be option D)50%