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MPP > Public Economics > Flashcards

Public Economics Flashcards

1
Q

Definition of Public Economics

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2
Q

4 questions of PE

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3
Q

when should the gov intervene in the economy (in general)?

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4
Q

Define externalties

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5
Q

Define imperfect competition

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6
Q

Define asymmetric information

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7
Q

what are the functions of taxation?

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8
Q

types of taxation?

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9
Q

5 desirable characteristics of taxation

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10
Q

define deadweight loss in taxation

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11
Q

3 rules of tax incidence

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12
Q

general equilibrium vs partial equilibrium in taxation: meaning

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13
Q

tax fairness: define

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14
Q

redistribution definition

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15
Q

optimal commodity taxation (Ramsey’s rule) + equity implications

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16
Q

optimal income taxation

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17
Q

define marginal tax rate

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18
Q

define average tax rate

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19
Q

define horizontal and vertical equity of taxation

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20
Q

equation consumer’s tax burden

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21
Q

equation producer’s tax burden

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22
Q

Income definition

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23
Q

Wealth definition

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24
Q

VAT taxes definition

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25
Q

Excise taxes definition

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26
Q

Taxable income definition

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27
Q

3 effects of general equilibrium taxation

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28
Q

define progressive/proportional/regressive tax systems

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29
Q

3 phases of taxation in developing countries

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30
Q

1st phase of taxation in developing countries: goals, policies and results + characteristics of dev. countries that influenced ability to collect taxes

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31
Q

2nd phase of taxation in developing countries (Washington Consensus): goals, policies + flat tax, results

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32
Q

Flat tax in Russia

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33
Q

Taxation in Latin America after 2000 + case of Uruguay: policies and results

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34
Q

define capital

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35
Q

what is capital gains tax?

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a tax levied on capital gains or profits from the sale of specific types of assets.

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36
Q

what is the global wealth tax?

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37
Q

what is the tax on corporate income?

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38
Q

Arguments in favour of the Flat Tax

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39
Q

Explain graph Deadweight loss in taxation

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40
Q

Explain graph substitution effect in taxation

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41
Q

Explain graph income effect in taxation

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42
Q

Define social security

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43
Q

Define social insurance

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44
Q

Define self insurance

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Private means of smoothing consumption

45
Q

Why people buy insurance?

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46
Q

Define consumption smoothing

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47
Q

Define health insurance

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48
Q

Why does the government intervene in insurance?

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49
Q

Define asymmetric information in insurance

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50
Q

Define adverse selection in insurance

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51
Q

Define moral hazard in insurance

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52
Q

What is the poverty trap? + s-shaped curve

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53
Q

What is the expected utility model in insurance?

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the weighted sum of utilities across different states of the world, where weights are the probabilities of each state occurring.

54
Q

Define risk aversion

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55
Q

Define risk premium

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the amount that risk-averse individuals will pay for insurance above and beyond the actuarially fair price.

56
Q

pooling equilibrium vs. separating equilibrium in insurance

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57
Q

How to measure the importance of social insurance vs. self insurance for consumption smoothing?

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58
Q

the 4 lessons for optimal social insurance

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59
Q

Remedy for adverse selection?

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60
Q

Remedy for moral hazard?

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61
Q

Define social protection (+ 2 categories of social protection)

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62
Q

Define means tested transfer program + graph (effects on individuals’ labor supply decisions)

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63
Q

3 costs of welfare policy

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64
Q

What is the moral hazard in the context of welfare policy?

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65
Q

define categorical welfare program

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66
Q

what is the Benefit reduction rate?

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67
Q

define welfare state

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The welfare state is a way of governing in which the state or an established group of social institutions provides basic economic security for its citizens. By definition, in a welfare state, the government is responsible for the individual and social welfare of its citizens.

68
Q

define the degree of decommodification

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69
Q

define the 3 regimes of welfare

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70
Q

Cash welfare and in kind programs in USA

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71
Q

Conditional cash transfers in Latin America

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72
Q

Chile solidario

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73
Q

Non-contributory pension programs in Africa

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74
Q

What is Universal Basic Income?

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75
Q

Define individual failure

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76
Q

How can the government intervene in the economy (in general)?

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77
Q

WHAT are the effects of government intervention in the economy?

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78
Q

WHAT are the DIRECT effects of government intervention in the economy?

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79
Q

WHAT are the INDIRECT effects of government intervention in the economy?

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80
Q

What is welfare economics?

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81
Q

What is social efficiency?

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total social surplus (Consumer’s surplus + Producer’s surplus). Net benefits that consumers and producers received as a result of their trades of goods and services.

82
Q

What is social welfare?

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83
Q

How do consumers choose?

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84
Q

Define budget constraint + explain the graph

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85
Q

Define: utility, marginal utility, law of diminishing marginal utility

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86
Q

How changes in income affect consumer’s choices?

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87
Q

How changes in price affect consumer’s choices?

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88
Q

Define demand curve

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89
Q

Define supply curve

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90
Q

Define market equilibrium

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91
Q

Define deadweight loss (in general)

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92
Q

What are the 2 welfare Theorems?

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93
Q

Define Pareto efficiency

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94
Q

Define consumer’s surplus

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economic measurement of consumer benefits resulting from market competition. A consumer surplus happens when the price that consumers pay for a product or service is less than the price they’re willing to pay.

95
Q

Define producer’s surplus

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96
Q

Why should the government intervene in education?

A

Positive externalities: increased productivity, more civic engagement (improved democracy); less crime; helps social mobility (redistribution)

97
Q

What if government provides public education (graph)?

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98
Q

Explain positive/negative consumption/production externalities (graphs)

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99
Q

Explain the Coase Theorem

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under the right conditions parties to a dispute over property rights will be able to negotiate an economically optimal solution, regardless of the initial distribution of the property rights.

99
Q

Remedies to externalities?

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100
Q

What is a Pigouvian tax? Graph

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101
Q

Define public goods

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101
Q

Define non-rivalry and non-excludability

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102
Q

What are the problems with public goods?

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103
Q

Define the free rider problem

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104
Q

Define the tragedy of the commons

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105
Q

2 remedies for problems linked to public goods

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106
Q

Explain Laffer curve

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MPP (2 decks)

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