Economics · Public Finance
Consider the following statements regarding the Tiebout model of local public goods provision: (I) Tiebout's solution requires perfect mobility of consumers across jurisdictions. (II) The model implies that the Nash equilibrium of local government competition leads to Pareto-optimal provision of public goods. (III) Tiebout sorting eliminates the need for a Lindahl pricing mechanism at the local level. (IV) Empirical tests of Tiebout's hypothesis use house price capitalization as a proxy for revealed preferences. Which of the above statements are correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1All four statements
- 2I, III and IV only
- 3I, II and IV only✓
- 4I and II only
Correct answer
I, II and IV only
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Economics?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Public Finance MCQs →Want more practice questions on Public Finance?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Economics · Public Finance