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Tutorial 1

The document outlines a tutorial assignment for a Public Economics course at the University of Papua New Guinea, focusing on various aspects of public interventions, government policy restrictions, and the distinction between public financing mechanisms. It poses questions regarding the nature of government intervention, the positive and normative aspects of economic policies, and the implications of taxation and redistribution. Students are required to analyze these topics critically, demonstrating their understanding of economic principles and public policy.

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Jackie Konpes
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7 views2 pages

Tutorial 1

The document outlines a tutorial assignment for a Public Economics course at the University of Papua New Guinea, focusing on various aspects of public interventions, government policy restrictions, and the distinction between public financing mechanisms. It poses questions regarding the nature of government intervention, the positive and normative aspects of economic policies, and the implications of taxation and redistribution. Students are required to analyze these topics critically, demonstrating their understanding of economic principles and public policy.

Uploaded by

Jackie Konpes
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

University of Papua New Guinea

Public Economics, Semester 1, 2025


Tutorial 1 week 2 (Due in Week 3 during tutorial time)
(Grade weight: 2%)
_____________________________________________________________________________
1. Proper hygiene, such as regular hand-washing, can greatly limit the spread of many diseases.
How might this suggest a role for public interventions? What kinds of public interventions
might be possible? Suggest three distinct types of possible intervention. What should guide
the choice of economic policy?
2. What restricts the policies that a government can choose? Are there any arguments for
imposing additional restrictions?
3. Some goods and services are provided directly by the government, while others are funded
publicly but provided privately. What is the difference between these two mechanisms of
public financing? Why do you think the same government would use one approach
sometimes and the other approach at other times?
4. Which of the four questions are positive and which are normative? Explain your answer.
a) How might the government intervene?
b) When should the government intervene in the economy?
c) Who should the government intervene for?
d) Why do governments choose to intervene in the way that they do?
5. Distinguish between the positive and normative components of this statements: “High-
income earners should pay a high rate of tax because their labor supply is inelastic and the
revenue raised can be used to assist those on low incomes.”
6. Differentiate between partial equilibrium and general equilibrium. To analyze the effect of a
subsidy to rice production, would you employ a partial equilibrium or a general equilibrium?
7. One rationale for imposing taxes on alcohol consumption is that people who drink alcohol
impose negative spillovers on the rest of society—for example, through loud and unruly
behavior or intoxicated driving. If this rationale is correct, in the absence of governmental
taxation, will people tend to consume too much, too little, or the right amount of alcohol?
8. Why does redistribution cause efficiency losses? Why might society choose to redistribute
resources from one group to another when doing so reduces the overall size of the economic
pie?

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