ECON 3500 Lecture 9: UrbEc 7e Ch9 MA
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,000 / 1000) and a slope of - sh. 50 per acre. The head tax is per acre per citizen. The marginal benefit of the median voter equals the marginal cost (head tax) at 80 acres of open space. [increases, decreases] the total value of land from to : suppose the growth boundary quadruples the price of lots within the boundary. The policy [increases, decreases] the total value of land from to . The vote tally will be 4 landowners in favor and 8 opposed: suppose the city combines the proposed growth boundary with a capital-gains tax equal to 80% of the change in the price of land. The revenue from the tax will be redistributed, in equal shares, to landowners outside the boundary. The tax per inside landowner would be and the compensation per outside landowner would be . The vote tally will be 12 landowners in favor and 0 opposed: compensation for a growth boundary.