2023年财政学_哈维罗森_第七版_课后习题超详细解析答案英文全.pdf

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1、学习必备 欢迎下载 Instructors Manual to accompany Public Finance,Seventh Edition,by Harvey S.Rosen Suggested Answers to End-of-Chapter Discussion Questions Some of the questions have no single“correct”answer reasonable people can go off in different directions.In such cases,the answers provided here sketch

2、only a few possibilities.Chapter 1-Introduction 1.a.Putins statement is consistent with an organic conception of government.Individuals and their goals are less important than the state.b.Rehnquist makes a clear statement of the mechanistic view of the state.2.a.A person with an organic conception o

3、f the state might react favorably,arguing that even if an individual owner is worse off because he must show only French movies,the nation is better off because it achieves more unity.b.A libertarian would certainly reject this policy and the reasoning behind it-there is no“national interest”indepen

4、dent of the interests of individuals,and people should have the right to run their lives in the way that they prefer-including seeing whatever movies they want.c.A social democrat would try to balance these two aims,and it is hard to predict how he or she would come out.3.The mechanistic view of gov

5、ernment says that the government is a contrivance created by individuals to better achieve their individual goals.Within the mechanistic tradition,people could disagree on the obesity tax.Libertarians would say that people can decide what is best for themselves-whether to consume high calorie food-a

6、nd do not need prodding from the government.In contrast,social democrats might argue that people are too short sighted to know what is good for them,so that government-provided inducements are appropriate.4.a.If the size of government is measured by direct expenditures,the mandate does not directly

7、increase it.Costs of compliance,however,may be high and would appear as an increase in a“regulatory budget.”b.Its hard to say whether this represents an increase or decrease in the size of government.One possibility is that GDP stayed the same,and government purchases of goods and services fell.Anot

8、her is that government purchases of goods and services grew,but at a slower rate than the GDP.One must also consider coincident federal credit and regulatory activities and state and local budgets.学习必备 欢迎下载 c.The federal budget would decrease if grants-in-aid were reduced.However,if state and local

9、governments offset this by increasing taxes,the size of the government sector as a whole would not go down as much as one would have guessed.5.The inflation erodes the real value of the debt by 0.021 x 311 billion or 6.5 billion.The fact that inflation reduces the real debt obligation means that thi

10、s figure should be included as revenue to the government.6.The federal government grew by$450 billion.However,because the price level went up by 16 percent,in terms of 2001 dollars this amounted to a real increase of$224 billion(=$1.86 trillion-1.16*$1.41 trillion=$1.86 trillion-$1.64 trillion).Note

11、 that the increase in prices of 16 percent in the Rosen text(p.18)differs from official sources.According to the 2004 Economic Report of the President(Table B-60),the CPI-U was 177.1 in 2001 and was 144.5 in 1993,an increase of 22.5 percent,not 16 percent.If one uses these numbers,government spendin

12、g increased in constant 2001 dollars from$1.72 trillion in 1993 to$1.86 trillion,or$140 billion.As a proportion of GDP,federal spending in 1993 was 21.2 percent and in 2001 it was 18.2 percent.Hence,by one measure,the size of government fell and by the other measure,it grew.To get a more complete an

13、swer,one would want data on the population(to compute real spending per capita).Also,it would be useful to add in expenditures by state and local governments,to see if the total size of government fell.Also,although it would be harder to measure,one would want to try to gain some sense of how the re

14、gulatory burden on the economy grew during this time period.Chapter 2 Tools of Positive Analysis 1.The reality that astronomers are trying to understand is not influenced by any“policies”that astronomers might implement.That is,planets and stars do act any differently when they are being analyzed,wh

15、ereas people can change their behavior.Moreover,the parameters with which astronomers must deal are constant over time(at least in the“short-run”of hundreds of years),while the parameters in economics can quickly change over time and across geography.2.A change in the m arginal tax rate changes the

16、individuals net wage.This generates both an income effect and a substitution effect.As long as leisure is a normal good,these effects work in opposite directions.Hence,one cannot tell a priori whether labor supply increases or decreases.One could ask taxpayers to describe how they would change their

17、 behavior under the proposal,but it is hard to imagine that this would yield useful results.In a social experiment,a control group would confront the status quo,and an experimental group would face the new tax regime.This is clearly infeasible.Econometric investigation of labor supply seems the best

18、 approach,particularly if data associated with past changes in tax rates can be brought to bear on the problem.3.Generally,economic outcomes are affected by a number of variables some of which are observed and others of which are unobserved.Economists often cannot perform controlled,randomized exper

19、iments,which makes it difficult to assess how any single 备欢迎下载学习必备欢迎下载学习必备欢迎下载学习必备欢迎下载学习载学习必备欢迎下载学习必备欢迎下载学习必备欢迎下载学习必备欢迎备欢迎下载学习必备欢迎下载学习必备欢迎下载学习必备欢迎下载学习学习必备 欢迎下载 variable affects a given outcome.Moreover,even in the cases when experiments are run(e.g.,the Negative Income Tax experiment or the RAND Hea

20、lth Insurance Experiment),a number of unintended behaviors can arise because people know they are in the experiment for a short amount of time and because of lack of generalizability.In the medical example here,brain impairment may be due to a number of factors that are either observed are unobserve

21、d.Ecstasy users clearly are not a random sample of the population,but are likely to differ in terms of their attitudes towards risk,their discount rates,and potentially many other ways.Hence,one cannot definitively conclude whether brain impairment is due to Ecstasy or some variable that is correlat

22、ed with Ecstasy use.There are numerous non-experimental methods that may be helpful in inferring the causal effect of Ecstasy.For example,if there were a plausible“instrumental variable”(perhaps the punitiveness of the drug laws in a state)that was correlated with the supply of Ecstasy but not other

23、wise correlated with the outcomes of interest,one may be able to estimate the causal effect of Ecstasy on long-run developmental problems.4.The text points out the pitfalls of social experiments:the problem of obtaining a random sample and the problems of extending results beyond the scope of the ex

24、periment.Participants in the study had found it to their advantage to be a part of the experiment,which may have resulted in a self-selected population unrepresentative of the wider group of health care consumers.In addition,the RAND Health Insurance Experiment was of limited duration,after which th

25、e participants would move to some other health plan.This design could induce certain behavior in the short-run that would not necessarily be present if the health insurance coverage were permanent rather than transitory.Further,physicians“standard practices”are largely determined by the circumstance

26、s of the population as a whole,not the relatively small experimental group.5.First,it is important to note that the numbers on page 32 of Rosens text actually show the surplus,not the deficit.That is,the negative surplus of$221.2 in 1990 is actually a deficit,while the positive surplus of$236.4 is a

27、 surplus.There is a very weak,negative relationship between surpluses and interest rates(the correlation coefficient is-.043),or put differently,a weak,positive relationship between deficits and interest rates.However it is expressed,it is weak-by“eyeballing”the data,it might appear that larger defi

28、cits lead to lower interest rates(for example,by comparing the data from 1980 with the data from 2000).One clearly would need more data to investigate this question.One would want to look at deficits relative to some benchmark,such as GDP.One would want to express both interest rates and deficits in

29、 real terms,rather than nominal terms.One would like to control for other factors that can affect interest rates,such as monetary policy and the level of economic activity.Finally,one would want to determine which way the causality runs do larger deficits cause higher interest rates,or do higher int

30、erest rates cause larger deficits(since,by construction,one of the largest items in the federal budget is interest on the debt).Chapter 4 Public Goods 1.a.Wilderness area is an impure public good at some point,consumption becomes nonrival;it is,however,nonexcludable.备欢迎下载学习必备欢迎下载学习必备欢迎下载学习必备欢迎下载学习载学

31、习必备欢迎下载学习必备欢迎下载学习必备欢迎下载学习必备欢迎备欢迎下载学习必备欢迎下载学习必备欢迎下载学习必备欢迎下载学习学习必备 欢迎下载 b.Water from a municipal water supply is both rival in consumption and excludable.My consumption of water precludes you from consuming the same water,thus it is rival.The municipality can control who consumes water by shutting off

32、 the flow to customers,thus it is excludable.This is a useful question for showing that not all publicly owned facilities are public goods.c.Medical school education is a private good.d.Television signals are nonrival in consumption.e.An Internet site is nonrival in consumption(although it is exclud

33、able).2.We assume that Cheetahs utility does not enter the social welfare function;hence,her allocation of labor supply across activities does not matter.a.The public good is patrol;the private good is fruit.b.Recall that efficiency requires MRSTARZAN+MRSJANE=MRT.MRSTARZAN=MRSJANE=2.But MRT=3.Theref

34、ore,MRSTARZAN+MRSJANE MRT.To achieve an efficient allocation,Cheetah should patrol more.3.A pure public good is nonrival in consumption,thus it is necessary to determine whether or not this is the case with the highway.That is,if the additional cost of another person“consuming”the highway is zero,th

35、en it is a public good.So,as long as the highway is not congested,then it can be considered to be a public good.However,adding another motorist to an already congested roadway can cause traffic jams that cost motorists more time to travel the highway,which would represent nonzero costs to having an

36、additional person use the highway.Therefore,the congestion of the roadway determines whether or not we could designate it as a public good.Note that we are assuming throughout that the highway is nonexcludable.To determine whether or not the privatization of the highway is a sensible idea,it is nece

37、ssary to consider the advantages and disadvantages of such an action.First,if the market structure is such that privatizing the highway would result in a monopolist in control of the highway,then this would be inefficient.Also,it would be difficult for the government to write a complete contract for

38、 maintaining the highway,which would also cause inefficiencies that would result from the privatization of the road.However,if the government owns the highway,it might not have the appropriate incentives to maintain it properly.In such a case,even ownership by a private monopolist might be a sensibl

39、e solution.4.The benefits of maintaining the incomes of the poor accrue largely to the recipients of welfare,not to society as a whole.Thus,it is implausible to think of welfare(or the administration of the welfare system)a s a public good.Unless there is a“warm-glow”from income redistribution,there

40、 is little basis for thinking that the provision of TANF,Medicaid,public housing,or food stamps offers much in terms of benefit to society as a 备欢迎下载学习必备欢迎下载学习必备欢迎下载学习必备欢迎下载学习载学习必备欢迎下载学习必备欢迎下载学习必备欢迎下载学习必备欢迎备欢迎下载学习必备欢迎下载学习必备欢迎下载学习必备欢迎下载学习学习必备 欢迎下载 whole.In terms of administration of welfare,it is har

41、d to say whether or not it should be publicly or privately administered.Private administration might be less costly.On the other hand,private administrators might have an incentive to deprive deserving individuals of benefits in order to cut costs.It could be difficult to write a contract to prevent

42、 this kind of behavior,because one cannot specify in advance every conceivable set of circumstances under which welfare should be granted.This kind of subjectivity was present in the 1960s,when caseworkers had a great deal of discretion in terms of which households to offer assistance to.This subjec

43、tivity led to accusations of discrimination and,from the 1970s onward,there has been far less subjectivity in terms of defining eligibility.Since that time,eligibility is fairly mechanically related to income,assets,family structure,and a number of other observable factors.Given the current system,i

44、t seems less difficult today to monitor a private firm than it would have been in the 1960s.5.A lower cost is a necessary(but not sufficient)condition to conclude that prisons should be privatized.A policy maker should be concerned both with costs and quality of prisons.Although,in principle,one cou

45、ld write a contract that is concerned about the quality of prisons(e.g.,whether the prisoners are treated decently,whether security is adequate,and so on),Hart,Shleifer and Vishny(1997)note that it is sometimes impossible to write a complete contract because one cannot specify in advance every possi

46、ble contingency.The key is whether the administration of prisons is a fairly“routine”activity where complete contracts can be written,or whether there are too many contingencies.6.As noted on page 65 of the textbook,the experimental results of Palfrey and Prisbrey(1997)suggest that there is some fre

47、e riding,but some people do contribute.Those authors found that,on average,people contribute a portion of their resources to the provision of a public good,and there is some free riding.That was the case in Manchester,Vermont.Also,Palfrey and Prisbrey found that when the experimental game was repeat

48、ed,people were more likely to free ride.This also happened in Manchester-in the second year,participation was less.7.There is no compelling reason for museums to be run by the government from the theory of public goods;thus,it is appropriate to think about privatization.Admissions to museums are cle

49、arly excludable.And viewing the artwork is also rival,because there is congestion when too many people are consuming the good.Thus,museums may be thought of as a private good rather than public good.In the United States,many great museums are run privately(not for profit),and they seem to do quite w

50、ell.In terms of private versus public production,the text points out that this decision should be based on relative wage and material costs in the public and private sector,administrative costs,diversity of tastes,and distributional issues.There is no compelling reason to think the private sector wo