According to the Tiebout hypothesis,
A) an optimal (or most efficient) level of output exists for every public good.
B) an efficient mix of public goods is produced when local land/housing prices and taxes reflect consumer preferences.
C) a good or service is usually so costly that its provision generally does not depend on whether any single person pays.
D) under certain conditions, when externalities are present, private parties can arrive at the efficient solution without government involvement.

Question

Quizplus · Accepted Answer

The Tiebout hypothesis posits that an efficient mix of public goods is produced when local land/housing prices and taxes reflect consumer/voter preferences, as individuals "vote with their feet" by moving to communities that best satisfy their preferences for public goods and taxation levels.

According to the Tiebout Hypothesis