Suppose Tax Shares Are Evenly Distributed for a Particular Service

question 30

Multiple Choice

Suppose tax shares are evenly distributed for a particular service at the amount of $100.00 per person. Which taxpayer suffers a political externality based on the taxpayer's marginal benefit for the service

• A) Taxpayer A has a marginal benefit of $100.00.
• B) Taxpayer B has a marginal benefit of $200.00.
• C) Taxpayer C has a marginal benefit of $90.00.
• D) Taxpayers B and C.

---

Definitions:

Electric Power Plant

A facility that generates electricity through various energy sources like coal, natural gas, nuclear, solar, or wind power.

Kilowatt-hours

A unit of energy equivalent to one kilowatt of power expended for one hour, commonly used to measure electricity consumption.

Fixed Costs

Fixed charges that stay steady irrespective of the amount of goods produced or sold, such as property leases, payroll, and indemnity costs.

Peak-period Capacity

The maximum output level that a company can sustain during the busiest period without increasing long-term fixed costs.