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Suppose That the Town of Mapledale Is Considering Hiring an Additional

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Suppose that the Town of Mapledale is considering hiring an additional firefighter. The expected benefit is estimated to be worth $5 for each of Mapledale's 15,000 residents. What should the city do?


Definitions:

Tax Revenue

The revenue governments receive as a consequence of taxes.

Deadweight Loss

Failure to reach free market equilibrium for a good or service leads to a loss in economic efficiency.

Labor Supply

The total hours that workers are willing and able to work at a given rate of pay, across different job markets or sectors.

Laffer Curve

A theoretical representation showing the relationship between tax rates and government revenue, positing that there is an optimum tax rate that maximizes revenue.

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