Consider a community consisting of 100 households, each of whom consumes $100,000 worth of housing. Each household also receives 20 units of a local public good which costs $75 per unit, per person to supply.
(a) Compute the total cost of providing the public good to all residents.
(b) Calculate the total value of taxable property and the property tax rate needed to balance the budget.
(c) What does each household pay in taxes? What is the cost per person of the public good? How do they compare?