-Broomfield city council is deciding how many police officers the city needs. Broomfield's population is 10,000 people. The marginal cost of a police officer is $60,000 per year. The marginal benefit schedule of an average city resident from police protection is shown in the table above. Police protection is a public good. If voters in Broomfield are rationally ignorant and the police department achieves the highest attainable budget, each resident of Broomfield will pay ________ per year in taxes.

Question

Quizplus · Accepted Answer

If the police department achieves the highest attainable budget, it will hire enough officers to equate the marginal cost with the marginal benefit. Given the marginal cost is $60,000, and assuming the marginal benefit per resident is $6 (from the table), each resident will pay $6 * 6,000 (assuming 10 officers) = $36,000, which divided by 10,000 residents equals $36 per resident.

-Broomfield City Council Is Deciding How Many Police Officers the City