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PUBLIC FINANCE_习题答案(HARVEY S. ROSEN ,SEVENTH EDITION)--SAMPLE_EXAMS
SAMPLE MIDTERM EXAM I
Part I is worth 36 points. Part II is worth 24 points.
Part I. (6 points each). Indicate whether each of the following statements is true, false, or uncertain, and explain your answer. Your grade will depend primarily on the quality of your explanation. If a word or phrase is underlined, your answer must include a concise definition of the word or phrase.
1. A consumption-efficient allocation of resources is socially desirable.
2. Suppose that everyone has a utility function that depends only on his or her income. Then the value of a utilitarian social welfare function is maximized when everyone has the same after-tax income.
3. Under the 1996 welfare reform, each state receives a fixed grant from the federal government to pay for its income maintenance policies. However, for each dollar of its own money that the state spends on welfare, the federal grant is reduced by a dollar.
4. Under the Social Security system, an individual’s retirement benefits are directly proportional to the amount of payroll taxes that he or she has paid into the system.
5. Former President Clinton once proposed that individuals between the ages of 55 and 64 be allowed to buy into the Medicare system if they so choose. This is a good example of how social insurance can solve the adverse selection problem.
6. Political economy models of bureaucratic behavior assume that a bureaucrat’s goal is to maximize the welfare of the citizens.
Part II. Your answers to the following questions should take advantage of the relevant economic tools.
7. (10 points) Several months ago, the newspaper USA Today published an article that was critical of the large amount of money that the government spends to subsidize the energy industry. In response, a spokesman for the industry observed, “Some of the alleged subsidies don’t even go to the industry. For example, the government provides money to low-income families to help pay heating bills.” Evaluate this response carefully. Y
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