Assume there are four people in a city. Person A owns nothing, person B owns a chicken
shack worth $10,000, person C owns a small garden worth $130,000 and person D owns
a cottage worth $240,000. They want to finance a public children’s zoo, a local public
good. The zoo will cost $56,000 and should be financed by a property tax with equal tax
rates per property value.
Calculate the tax rate (in %) for the following cases
a. all four people live in the city
b. there is a city of four B-like people
c. there is a city of four C-like people
d. there is a city of four D-like people
e. there is a city of only one A, one B and one C (D has left).