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