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 2 units of consumption good per each unit of public good.

ExogenousIncome: Y= 20

Lump-sum tax: T

Governmentefficiency: q

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

If the optimallump-sum tax,T*, that maximizes the representativeconsumer's utility and balance the governmentbudget, is10, then what is the value governmentefficiency, q?

A.

2/3

B.

0.5

C.

1/3

D.

0.2

E.

none of the above