海曼财政学课后答案ch02文档格式.docx

海曼财政学课后答案ch02文档格式.docx

《海曼财政学课后答案ch02文档格式.docx》由会员分享，可在线阅读，更多相关《海曼财政学课后答案ch02文档格式.docx（9页珍藏版）》请在冰豆网上搜索。

andGovernment

INSTRUCTIONAOBJECTIVES

Themainobjectiveofthischapteristodeveloptheconceptofefficiencyandshowstudentshowitisusedtoevaluateeconomicperformanee.Tobeginthediscussion,itisnecessarytodrawthedistinctionbetweenpositiveandnormativeeconomics.Bothoftheseapproachesareusedinthechapter.Anadditionalinstructionalobjectiveisthereforetodemonstratetheusefulnessofeachtypeofanalysis.

Theconceptofefficiencyiscarefullylinkedtoresourceallocationandeconomictransactions.Thechapteralsointroducesthestudenttomarginalanalysisofresourceallocation.Thedistinctionbetweentotalsocialcostandbenefit,andmarginalsocialcostandbenefitisdrawnforstudents.Graphicanalysisisthenusedtoderivethemarginalconditionsforefficiency.TheobjectiveistoshowstudentsthatmaximizationofnetsocialbenefitrequiresthatallactivitiesbeundertakenineachtimeperioduptothepointatwhichMSB=MSC.

Theanalysisisthenusedtoevaluateresourceallocationincompetitivemarketsoperatingunderconditionsofperfectcompetitionwithnoexternalities.Thisisfollowedbyexamplesshowinghowmonopolypowerandgovernmentinterventioncanresultinlossesinefficiencyinmarkets.Theobjectivehereistoshowhowwelfaretrianglescanbeusedtomeasurelossesinwell-beingwhenefficiencyisnotachieved.

Theequity-efficiencytradeoffisalsointroducedinthechapter.Theutilitypossibilitycurveisusedtoshowstudentshowcitizensoftenrationallyopposemovementstoefficientresourceusewhencompensationforlossesinwell-beingisnotactuallypaid.Positiveanalysisoftheequity-efficiencytradeoffisalsoprovided,therebyclosingthechapterwithanillustrationofhowthepositiveapproachisusefultonormativeanalysis.

CHANGESINTHISEDITION

Thischapterhasbeenupdatedwhereneeded.Otherwise,therehavebeennochangesinthiscoretheorychapter.Anewproblemwasaddedtotheendofthechapter.

CHAPTEROUTLINE

PositiveandNormativeEconomics

NormativeEvaluationofResourceUse:

TheEfficiencyCriterion

MarginalConditionsforEfficiency

Markets,Prices,andEfficiencyConditions

WhenDoesMarketInteractionFailtoAchieveEfficiencyMonopolisticPower

HowTaxesCanCauseLossesinEfficiencyinCompetitiveMarketsPublicPolicyPerspective:

TheTaxSystemandtheBirthRat—eAnExampleofPositiveEconomicAnalysis

HowGovernmentSubsidiesCanCauseLossesinEfficiencyMarketFailure:

APreviewoftheBasisforGovernmentActivityEquityversusEfficiency

TheTradeoffbetweenEfficiencyandEquity:

AGraphicAnalysis

TheTradeoffbetweenEquityandEfficiencyinaSystemofCompetitiveMarkets

PositiveAnalysisTradeoffBetweenEquityandEfficiency

InternationalView:

AgriculturalSubsidies,InternationalTradeRestrictions,andGlobalEfficiency

MAJORPOINTSANDLECTURESUGGESTIONS

1.Instructorsmaywishtoemphasizethedifferencebetweenthenormativeandpositiveapproaches.Thenormativeapproachisbasedonunderlyingvaluesthatembodyanindividualisticethic.Thepositiveapproachissimplyascientificmethodusedtoformulatehypothesessubjecttoempiricalverification.Ipointouttomystudentsthatthenormativeapproachinpublicfinancesetsupbenchmarksagainstwhichtheimpactofgovernmentregulations,expenditures,andtaxescanbeevaluated.

2.Therearetwoaspectsofefficiencythatareusefultoemphasizeinlectures:

a.Efficiency,asthetermiscommonlyusedbythelayperson,simplymeansavoidanceofwasteinachievinganyusefulobjective.Studentsaremostlikelyalreadyfamiliarwiththisaspectofefficiency.

b.Thesecondaspectofefficiencydealswithexchange.Evenwhenproductionisaccomplishedwithoutwaste,additionalnetgainsareusuallypossiblethroughmutuallyagreeableexchanges.

Indiscussingthesecondaspectofefficiency,withwhichstudentsarelessfamiliar,youcanpointoutthatfreedomtotradeisanimportantaspectofefficiency.Constraintsonmutuallyagreeabletradetherebypreventattainmentofefficiencywhennothirdpartiesareaffectedbythosetransactions.

3.Thederivationofthemarginalconditionsforefficiencyprovidesagoodopportunitytoreviewmarginalanalysisforstudents.Makesuretoconfineyourdiscussiontoaparticulargood.Theexampleinthetextusesbread.IfindthatstudentsarequitereceptivetothenotionthatnetsocialgainsaremaximizedwheneachpossiblegoodorserviceismadeavailableuptothepointatwhichMSB=MSC.TheinclusionofthetotalsocialbenefitandtotalsocialcostcurvesinFigure2.1inthetexthelpsstudentsseehowadditionalproductionofgoodsisinefficientbeyondthepointatwhichMSB=MSC,eventhoughTSB>

TSCforadditionaloutput.

4.Noticehowthemargi