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Ollscoil na hÉireann, Gaillimh GX_____
National University of Ireland, Galway
Summer Examinations 2009 / 2010
Exam Code(s) 3BA1, 3BA5, 3BA6, 4BA4, 1OA1, 1EM1, 3BC1, 4BC(2,3,4,5), 1EK2, 1EK Exam(s) B.A., B.A. (ESS), B.A. (PSP), B.A. (Int’l), Occasional, Erasmus, B.Comm., B.Comm. (Language), H.Dip.Econ.Sc. Module Code(s) EC Module(s) Public Economics Paper No. 1 Repeat Paper External Examiner(s) Professor Robert E. Wright Internal Examiner(s) Prof. John McHale Dr. Mary Silles Instructions: Instructions: 10 Questions, Attempt all questions in part A, three questions from part B. Duration 2 hours No. of Pages 2 Department(s) Economics Course Co-ordinator(s) Dr. Mary Silles Requirements : MCQ Handout Statistical Tables Graph Paper Log Graph Paper Other Material
Undergraduate Public Economics Exam Questions EC386 Public Economics (Summer) Instructions: 10 Questions, attempt all questions in part A, three questions from part B. Part A Attempt all questions.
Explain the efficiency claims of the Coase theorem in the context of a negative externality. (11 marks)
In designing economic policy, a policy-maker will always aim to achieve a Pareto- efficient allocation. Discuss. (11 marks).
Discuss the difficulties that hinder the usefulness of lump-sum taxes as a redistribution tool of public policy. (11 marks)
Explain how public goods, those goods which are typically provided by government, are distinguished from privately provided goods. (11 marks)
Using a demand and supply diagram for a particular good that is taxed, explain the difference between the legal and economic incidence of taxation. (11 marks) Part B Attempt any three questions.
Explain how a social planner may reach the best trade-off between efficiency and equity to achieve the socially optimal division of resources. (15 marks) 7 The enhancement of competition only works if it is possible for competitors to be viable. Discuss in the context of a natural monopoly. (15 marks)
Provide a model that can reveal how the basic characteristics of a public good lead to a market equilibrium which is not Pareto-efficient, although it is privately efficient. ( marks)
Set out a number of theories that have been advanced to explain the growth of the public sector over the past century. (15 marks)
In the presence of a negative externality, explain how economic policy can be used to induce agents to internalize the external effects of their decisions to achieve a Pareto- efficient outcome. (15 marks)
