Suppose the following model of government efficiency.

Utility function over consumption of private goods(C) and public goods(G) is such that this country desires to have 3 unit of public good per each unit of consumption good.

ExogenousIncome: Y= 18

Lump-sum tax: T

Governmentefficiency: q= 0.2

(This measures the number of public goods that can be produced from one unit of private consumptiongood)

If we want to maximize the representativeconsumer's utility and balance the governmentbudget, what is the optimallump-sum tax?

A.

16.875

B.

2.25

C.

11.25

D.

3.375

E.

none of the above