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Question About Finance |
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General Details |
| Title: |
Public Finance (#38CE) |
| Category: |
Finance |
| Inquirer: |
Moochie |
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Initial Price: |
$40.00 |
| Description: |
Question 1.
In 2003, Hong Kong levied a tax of $51 per month on employers of domestic helpers from other nations. Many of these workers were from the Philipines and President Arroyo of that country called the tax "unjust and unfair." Given that the tax was levied on employers, was President Arroyo correct in being disturbed? Sketch a model that is consistent with her concerns being justified?
Question 2
The federal government subsidizes the oil and gas industries. In defense of the subsidies, a sopkesman for the industry observed "some alleged subsidies don't even go to the industry. For example, the government provides money to low-income families to help pay heating bills" [Cavaney, 1998]. Use a supply and demand model to analyze the incidence of a subsidy to consumers of oil and gas, and use your analysis to evaluate the claim that the subsidies to low-income families do not benefit the industry. [Note: To construct the model, note that subsidy is just a negative tax.]
Hint: This question is from the 7th edition of the Harvey Rosen text on public finance. In addition to what is asked in the question, be sure to discuss and show government revenue, consumer and producer surplus, the tax wedge, excess burden and discuss the relative efficiency of the policy.
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| Question Expires: |
Question closed |
| End Time: |
2006-09-30 16:49:34 Started:
2006-09-30 10:14:21
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