There are ten states in the democratic nation of Katlandia, and each state has ten thousand residents. Although incomes vary, each Katlandian pays a tax equal to the total cost of all government projects divided by the number of residents in the country. Currently, two states each have one army base. An army base adds $2 million to a state's local economy each year. In addition, in terms of increased security, the annual marginal benefit to Katlandia of having an additional army base is shown below. The total cost of an army base is $8 million per year. The marginal benefit of adding a third army base equals the local marginal benefit of $2 million plus the marginal benefit to Katlandia of ________.

Question

There are ten states in the democratic nation of Katlandia, and each state has ten thousand residents. Although incomes vary, each Katlandian pays a tax equal to the total cost of all government projects divided by the number of residents in the country. Currently, two states each have one army base. An army base adds $2 million to a state's local economy each year. In addition, in terms of increased security, the annual marginal benefit to Katlandia of having an additional army base is shown below. The total cost of an army base is $8 million per year.  The marginal benefit of adding a third army base equals the local marginal benefit of $2 million plus the marginal benefit to Katlandia of ________.

Quizplus · Accepted Answer

From the graph, we can see that, in terms of increased security, the marginal benefit to Katlandia of a third army base is $3 million.

There Are Ten States in the Democratic Nation of Katlandia