Kris, Taylor and Max are the only three residents in a neighborhood. A public good that would benefit all of them has a one-time installation cost of $900. The value of the public good to each resident is shown in the table below. Any tax plan must be approved by simple majority. $$\begin{array} { | c | c | c | }
\hline \text { Resident } & \text { Reservation Price } & \text { Income } \
\hline \text { Kris } & \$ 100 & \$ 1,000 \
\hline \text { Taylor } & \$ 200 & \$ 5,000 \
\hline \text { Max } & \$ 700 & \$ 6,000 \
\hline
\end{array}$$ Suppose that the government knows each resident's reservation price. To collect no more than $900 in tax revenue, each resident should be charged ______ percent of their ______.

Question

Kris, Taylor and Max are the only three residents in a neighborhood. A public good that would benefit all of them has a one-time installation cost of $900. The value of the public good to each resident is shown in the table below. Any tax plan must be approved by simple majority. $$\begin{array} { | c | c | c | } 
\hline \text { Resident } & \text { Reservation Price } & \text { Income } \
\hline \text { Kris } & \$ 100 & \$ 1,000 \
\hline \text { Taylor } & \$ 200 & \$ 5,000 \
\hline \text { Max } & \$ 700 & \$ 6,000 \
\hline
\end{array}$$ Suppose that the government knows each resident's reservation price. To collect no more than $900 in tax revenue, each resident should be charged ______ percent of their ______.

Quizplus · Accepted Answer

The Answer of Kris, Taylor and Max are the only three residents in a neighborhood. A public good that would benefit all of them has a one-time installation cost of $900. The value of the public good to each resident is shown in the table below. Any tax plan must be approved by simple majority. $$\begin{array} { | c | c | c | } 
\hline \text { Resident } & \text { Reservation Price } & \text { Income } \
\hline \text { Kris } & \$ 100 & \$ 1,000 \
\hline \text { Taylor } & \$ 200 & \$ 5,000 \
\hline \text { Max } & \$ 700 & \$ 6,000 \
\hline
\end{array}$$ Suppose that the government knows each resident's reservation price. To collect no more than $900 in tax revenue, each resident should be charged ______ percent of their ______.

Kris, Taylor and Max Are the Only Three Residents in a Neighborhood