财政学第七版答案第七章

财政学第七版答案

Part 2 – Analysis of Public Expenditure

1. Utilitarianism suggests that social welfare is a function of inpiduals’ utilities. Whether

the rich are vulgar is irrelevant, so this part of the statement is inconsistent with utilitarianism. On the other hand, Stein’s assertion that inequality per se is unimportant is inconsistent with utilitarianism.

a.

b. To maximize W, set marginal utilities equal; the constraint is Is + Ic = 100. So, 400 - 2Is = 400 - 6Ic. substituting Ic = 100 - Is gives us 2Is = 6 (100 - Is ). Therefore, Is = 75, Ic = 25. If only Charity matters, then give money to Charity until MUc = 0 (unless all the

money in the economy is exhausted first).

So,

400-6 Ic = 0; hence, Ic = 66.67.

Giving any more money to Charity causes her marginal utility to become negative,

which is not optimal. Note that we don’t care if the remaining money ($33.33) is

given to Simon or not.

If only Simon matters, then, proceeding as above, MUs. 0 if Is = 100; hence, giving

all the money to Simon is optimal. (In fact, we would like to give him up to $200.)

MUs = MUc for all levels of income. Hence, society is indifferent among all

distributions of income. 2. c.

3. The main conceptual problem with the poverty gap is that it doesn’t account for the

income effect on labor force participation rates. The poverty gap is calculated assuming there are no behavioral responses; e.g., that labor income would remain unchanged even after the income was transferred to the poor population, but economic theory predicts that this will not be so. In fact, if the poor household were given enough income to bring it out of poverty, we would believe that the household would work less as a result of receiving this transfer. This complicates the analysis, of course, because once the household works less, then it will generate less labor income, thus lowering its overall income. This means that the poverty gap actually understates the amount of money necessary to alleviate poverty in the United States. In addition, the poverty gap is based on the official poverty line, which is thought to be an ad-hoc measure of the true “needs” of a family.

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财政学第七版答案

Chapter 7 – Income Redistribution: Conceptual Issues

4. A day care center is an example of an in-kind compensation. The figure below is similar

to Figure 8.2 in the text. The original budget line is G1 H1 If the employee received $5,000 cash, the budget line moves to G2 H2 . An employee who uses the day care center may not be $5,000 better off. The employee consumes at point A, but would be better off at point B, which represents consumption after a cash transfer of $5,000.

5. a.

b.

6. a.

This would increase the incomes of the providers of computer equipment and the inpiduals who maintain the equipment. In the long run, this might also increase the incomes of the students who use the equipment. Moreover, giving a laptop to all seventh graders (rather than poor seventh graders) may simply “crowd-out” computer transfers from parents to children. One could imagine that nowadays many children do have a computer at home, paid for by the parents. This government transfer may simply result in less parental transfer to the child. Providing free after-school programs for children in impoverished families largely acts as an in-kind transfer for poor, working households. The program is of little value for unemployed households, as the alternative would be childcare at home. For those who are employed, and paying for childcare, this program provides an alternative and effectively changes the after-tax, after-working-cost wage. This also may affect work behavior on the extensive margin. The likely “losers” from such a program are childcare providers, who see a reduction in demand for their services. In principle, this reduction in demand could lower the hourly childcare cost for all workers with children, though this effect is likely to be modest because most impoverished families do not have a very large labor force attachment and, thus, their effect on the childcare market as a whole is likely to be small. False. Society is indifferent between a util to each inpidual, not a dollar to each inpidual. Imagine that UL=I and UJ=2I. Then each dollar given to Jonathan raises welfare more than the same dollar given to Lynne.

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财政学第七版答案

Part 2 – Analysis of Public Expenditure

b.

c. True. The social welfare function assumes a cardinal interpretation of utility so that comparisons across people are valid. False. Departures from complete equality raise social welfare to the extent that

they raise the welfare of the person with the minimum level of utility. For

example, with the utility functions UL=I and UJ=2I, the social welfare function

W=min[UL,UJ] would allocate twice as much income to Lynne than Jonathan.

7. Initially the price of food was $2 and the price of other goods was $1. The black market

for food stamps changes the price of food sold to $1. In Figure 7.2 of the textbook, as one moves to the “northwest” from point F, the segment will now have a slope (in absolute value) of 1 rather than 2. The black market may make the inpidual better off if the best point on her budget constraint AFD was initially at the corner solution of point F, and the black market certainly does not make her worse off. It is important to note that the black market does not always make the recipient better off. If the (absolute value) of the marginal rate of substitution (MRS) were between 1 and 2, the indifference curve would not “cut” into the new part of the budget constraint with the black mar …… 此处隐藏：5166字，全部文档内容请下载后查看。喜欢就下载吧 ……