Governments sometimes provide social programs universally to everyone, and sometimes government social programs are means-tested. Briefly describe means-testing, and discuss at least one advantage and at least one disadvantage of this approach compared to universal provision.
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Governments sometimes provide social programs universally to everyone, and sometimes government social programs are means-tested. Briefly describe means-testing, and discuss at least one advantage and at least one disadvantage of this approach compared to universal provision.
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- Please answer this question using a graph. Suppose a new social service is introduced by a government at a cost of $3,000. This service has not been provided before and there is no available substitute for this service. Economists have estimated that the marginal benefit of the new service is given by: MB = 100 − x where x is the quantity (in hours) of the service that is used. Please note the MB gives both the marginal private benefit (MPB) and marginal social benefit (MSB) (i.e., MB = MPB = MSB). Question: Suppose the $3,000 investment can only provide 50 hours of service. Explain what you think will happen if the service is provided for free.The figure below shows the market for higher education. The market demand curve for higher education reflects only the marginal private benefit (MPB) that individuals receive. Since this is a market with positive externalities, suppose the government provides a subsidy to consumers of higher education (students) that is equal to the marginal social benefit (MSB) minus the marginal private benefit (MPB), in this case, $8, 000 per student. With the subsidy, the demand curve will shift and become the same as the marginal social benefit (MSB) curve. Move the demand curve below to illustrate this shift. Be sure to take the exact size of the subsidy into account. Precise answers are required. Provide your answer below: 18 16 14 S(MPC) 10 -8 O Market Equilibrium (800,8) Social Equilibrium (800,8) -6 -4- 2- D(MPB) 16001800 1000 1200 Quantity (in thousands of college degrees) -200 0 200 400 600 800 1400 -2 Price (in thousands of $)True or false and use a graph to explain: a) can it be welfare-improving for governments to undertake investments that would not be profitable for private firms? b) when there is congestion, do you think a toll road can lead to a higher level of social welfare than a freeway, but in the absence of congestion, freeways are better than toll roads?
- What distinguishes a public good from a private good? What kind of market failure is addressed when goods are publicly supplied? Why do some private goods like elementary education or public health services get supplied as public goods? In your understanding of evidence from India or other countries on educational outcomes of public schools or delivery of public health services, is public spending on education or public health a good idea, if not, why not?When determining the number of public goods to produce, government must analyze the Marginal Social Benefit (MSB) and Marginal Social Cost (MSC) of each good so they can carefully choose the optimal number of goods to produce in order to Maximize the benefit to society. Answer the questions below about MSB and MSC. Then use the table below the questions to find the number of parks that the government should produce based on the information provided. You will need to complete the table to answer the questions. For questions 4-6 remember to use The Rational Rule to determine the answer to "how many" parks. 2. Define MSB 3. Define MSC 4. How many public parks will be built in this town? 5. If the MSC of each public park decrease to $300, what will be the change in the number of public parks built in this town be? 6. Now assume the social benefit gained with each public park is cut in half. As a social cost of $300 per park, how many public parks will be built in this town? Explain. Total…The figure below shows the market for driver education programs. The market demand curve for driver education reflects only the marginal private benefit (MPB) that individual drivers receive from the programs. Since this is a market with positive externalities, suppose the government provides a subsidy for driver education programs that is equal to the marginal social benefit (MSB) minus the marginal private benefit (MPB), in this case, $20 per driver. With the subsidy, the demand curve will shift and become the same as the marginal social benefit (MSB) curve. Move the demand curve below to illustrate this shift. Be sure to take the exact size of the subsidy into account. Precise answers are required. Also, make sure to position the point Social equilibrium correctly. Provide your answer below: 65 S (MPC) -50- -45 -40 35 30 Market Equilibrium (150,30) Social Equilibrium (150 30) 25 20- 15- 10- -5 D(MPB) -50 50 100 150 200 250 300 350 400 450 500 -5 Quantity of driver education programs…
- Identify a newspaper article that illustrates a market failure in Barbados. Ensure that you provide a screenshot of the article in your submission. NOTE: Only the following market failures should be examined: public good, asymmetric information, positive or negative externality. Suggest a relevant government policy that would yield the efficient outcome and carefully explain the process through which the implementation of the government policy will lead to the optimal outcome. How will the imposition of the chosen government policy impact consumersurplus, producer surplus and total surplus in this scenario?Please answer this question using a graph. Suppose a new social service is introduced by a government at a cost of $3,000. This service has not been provided before and there is no available substitute for this service. Economists have estimated that the marginal benefit of the new service is given by: MB = 100 – x %3D where x is the quantity (in hours) of the service that is used. Please note the MB gives both the marginal private benefit (MPB) and marginal social benefit (MSB) (i.e., MB = MPB = MSB). %3D Question: suppose the $3,000 investment can only provide 50 hours of service. Explain what you think will happen if the service is provided for free.The government uses several tools to implement environmental regulation. For example, mandatory production standards are designed to prevent companies from damaging a public good such as air or water. Emission taxes that create financial incentives for industries to reduce known pollutants, for example, from oil and coal production, are used to reduce negative externalities. The government can also force a company that causes an environmental problem to clean it up, thus solving the free rider problem. Nevertheless, government regulation imposes costs on society: Higher production costs due to regulation may be passed on to households in the form of higher prices, which—if large enough—can harm the economy. Legislation and its enforcement increase the size and cost of government. What type of analysis does government engage in to protect public goods? Explain using economic terms. What is government goal?
- Suppose there are two residents in a neighborhood, and you know both of their demand curves for a public good. What would you have to do in order to figure out what the social demand curve? a-Subtract the demand of the person with the higher valuation of the public good from the demand of the person with the lower valuation of the public good b-Add their demand curves together c-Multiply the two demand curves together d-Subtract the demand of the person with the lower valuation of the public good from the demand of the person with the higher valuation of the public goodSuppose a new social service is introduced by a government at a fixed cost of $3,000 (note: there is no marginal cost to provide this service). This service has not been provided before and there is no available substitute for this service. Economists have estimated the marginal benefit of the new service is given by: MB = 100 – Q where Q is the quantity (in hours) of the service that is used. Please note the MB gives both the marginal private benefit (MPB) and marginal social benefit (MSB) (i.e., MB = MPB = MSB). The government imposes a price to ration use of the service to recover part of its costs. What price should be introduced to ration the use of the service to 50 hours? What is the net social benefit when the service charge is used? How does charging a price compare to providing it for free and/or rationing? Be Hint(s): similarly, think about measuring the area of consumer surplus and compare it to the governments cost. You may want to complete Q5 as you complete this…Suppose a new social service is introduced by a government at a fixed cost of $3,000 (note: there is no marginal cost to provide this service). This service has not been provided before and there is no available substitute for this service. Economists have estimated the marginal benefit of the new service is given by: MB = 100 – Q where Q is the quantity (in hours) of the service that is used. Please note the MB gives both the marginal private benefit (MPB) and marginal social benefit (MSB) (i.e., MB = MPB = MSB). Now, suppose the $3,000 investment can only provide 50 hours of service. Please draw the supply and demand graph for this service. Make sure to use all relevant information from the above questions. Please label your graph carefully.