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With $300 million in state aid to attract 1500 new jobs, the initial marginal social cost to Alabama taxpayers of attracting the Mercedes plant was
With $300 million in state aid to attract 1500 new jobs, the initial marginal social cost to Alabama taxpayers of attracting the Mercedes plant was $200000 per job. Estimate the minimum marginal social benefit required to make this a reasonable expenditure from the perspective of Alabama taxpayers. Do the facts of this case lead you to believe that it is more likely that Alabama underbid or overbid for this project? Explain
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