School Financing Arrangements Are Most Vulnerable to Being Declared Unconstitutional

question 28

Multiple Choice

School financing arrangements are most vulnerable to being declared unconstitutional in

• A)State 1, where taxpayers claim they cannot afford any further increases in property taxes.
• B)State 2, where there is no state income tax.
• C)State 3, where annual revenues in all districts fall below projected needs.
• D)State 4, where there are substantial differences in districts' average spending per student.

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Definitions:

Market Price

The current price at which an asset or service can be bought or sold in the marketplace.

ATC

Average Total Cost, the total cost per unit of output when all fixed and variable costs are considered.

Perfectly Competitive Firm

A firm in a perfectly competitive market that cannot influence the market price and thus takes the price as given for its decision making.

Economic Costs

Economic Costs include both the explicit costs (direct payments) and implicit costs (opportunity costs) associated with the resources used in the production of goods or services.