Problem 1: State whether each activity should be under control of the federal, state, or local government, and explain why. a. Air pollution control regulations. b. Regulating solid waste landfills. c. Provision of weather satellites. d. Public refuses collection. e. Airport security.
Problem 2: An econometric study found that the more ethnically diverse a country, the more decentralized its public sector is likely to be, other things being the same (Panizza, 1999). Is this finding consistent with our theory of fiscal federalism?
Problem 3: David and Jonathan own identical homes. David has owned his home for many years and paid $100,000 for it. Jonathan purchased his home after a recent property tax increase and only paid $80,000 for his home. Should the local assessor change the assessed value of Jonathan's home to maintain horizontal equity? (Assume there has been not inflation in housing prices since David purchased his home and that David and Jonathan value equally all public services provided in the local community). In your answer, carefully define all key concepts.