上 海 金 融 学 院
公共经济学（双语）模拟试卷3
试
题
纸
ⅠTrue/False: (10 Questions, 2 Points Each, 20 Points Total)
1. A universally observed function of government is the establishment of property
rights. (
)
2. The normative approach to public finance prescribes certain actions to achieve
predetermined criteria. (
)
3. Bread is an example of a good that is nonrival in consumption. (
)
4. If a negative externality exists for sales of gasoline in a competitive market, more than the
efficient amount of gasoline will be sold per year. (
)
5. A political equilibrium for a pure public good is generally independent of the collective
choice rule used. (
)
6. A lump-sum tax results in both income and substitution effects. (
)
7. The excess burden of a tax on interest income is $5 billion per year. Total interest
income per year is $50 billion. The tax currently collects $15 billion in revenue per
year. The efficiency-loss ratio of the tax is therefore 0.33. (
)
8. If the market supply of labor services is perfectly inelastic, a tax on labor income
will reduce the net wages received by workers by the full amount of the tax per labor
hour. (
)
9. A lump-sum tax only results in income effects.
(
)
10. If the tax on the sale of gasoline is doubled from 20 cents per gallon to 40 cents
per gallon, the excess burden of the tax will quadruple. (
)
ⅡConcept: (10 Questions, 2 Points Each, 20 Points Total)
1. Public Finance
2. Unified Budget
3. Experimental Study
4. Pareto efficient
5. Free Rider
6. Incentive-Based Regulations
7. Voting Paradox
8. Progressive
9. Ramsey Rules
10. Vertical Equity
ⅢEssay Questions: (3 Questions, 20 Points Each, 60 Points Total)
1. Tarzan and Jane live alone in the jungle and have trained Cheetah both to patrol
the perimeter of their clearing and to harvest tropical fruits. Cheetah can collect 3
pounds of fruit an hour and currently spends 6 hours patrolling, 8 hours picking, and
10 hours sleeping.
a. What are the public and private goods in this example?
b. If Tarzan and Jane are each currently willing to give up one hour of patrol for 2
pounds of fruit, is the current allocation of Cheetah’s time Pareto efficient? Should
he patrol more or less?
2. In India, a drug used to treat sick cows is leading to the death of many vultures
that feed off of dead cattle. Before the decrease in the number of vultures, they
sometimes used to smash into engines of jets taking off from New Delhi’s airports,
posing a serious threat to air travelers. However, the decline of the vulture
population has led to a sharp has led to a sharp increase in the populations of rats
and feral dogs, which are now the main scavengers of rotting meat [Gentleman,
2006, p. A4]. There have been calls for a ban on the drug used to treat the cows.
Identify the externalities that are present in this situation. Comment on the
efficiency of banning the drug. How would you design an incentive-based regulation
to attain an efficient outcome?
3. A New York Times editorialist recently advocated a cut in the payroll tax. Among
other advantages, he argued that it would “stimulate hiring, since employers
shoulder half the burden of the tax”. Sketch a model that is consistent with this
argument. Is it realistic?
上 海 金 融 学 院
公共经济学（双语）模拟试卷3
__________专业 _________班 姓名 __________学号 _______ 座位号
答
次
Ⅰ
Ⅱ
Ⅲ
应得分
20
20
60
题
题
Ⅳ
Ⅴ
纸
Ⅵ
Ⅶ
Ⅷ
Ⅸ
Ⅹ
总分
100
实得分
阅卷教
师签名
得
分
Question
Number
ⅠTrue/False: (10 Questions, 2 Points Each, 20 Points Total)
1
2
3
4
5
6
7
8
9
10
Answer
Question
Number
Answer
得
1．
2．
3．
4．
5．
分
ⅡConcept: (10 Questions, 2 Points Each, 20 Points Total)
6．
7．
8．
9．
10．
得
分
ⅢEssay Questions: (3 Questions, 20 Points Each, 60 Points Total)
1．
2．
3．
上 海 金 融 学 院
公共经济学（双语）模拟试卷3
答案及评分标准
ⅠTrue/False: (10 Questions, 2 Points Each, 20 Points Total)
Question
Number
1
2
3
4
5
Answer
T
T
F
T
F
Question
Number
6
7
8
9
10
Answer
F
T
T
T
T
ⅡConcept: (10 Questions, 2 Points Each, 20 Points Total)
1. Public Finance: The field of economics (1’) that analyzes government taxation
and spending policies (1’).
2. Unified Budget: The document which itemizes (1’) all the federal government’s
expenditures and revenues (1’).
3. Experimental Study: An empirical study in which individuals are randomly (1’)
assigned to the treatment and control groups (1’).
4. Pareto efficient: An allocation of resources such that no person can be made better
off (1’) without making another person worse off (1’).
5. Free Rider: The incentive to let other people pay for a public good (1’) while you
enjoy the benefits (1’).
6. Incentive-Based Regulations: Policies that provide polluters with financial
incentives (1’) to reduce pollution (1’).
7. Voting Paradox: With majority voting, community preferences can be inconsistent
(1’) even though each individual’s preferences are consistent (1’).
8. Progressive: A tax system under which an individual’s average tax rate increases
(1’) with income (1’).
9. Ramsey Rules: To minimize total excess burden (1’), tax rates should be set so
that the tax-induced percentage reduction in the quantity demanded of each
commodity is the same (1’).
10. Vertical Equity: Distributing tax burdens fairly across people (1’) with different
abilities to pay (1’).
ⅢEssay Questions: (3 Questions, 20 Points Each, 60 Points Total)
1. Answer: We assume that Cheetah’s utility does not enter the social welfare
function(2’); hence, her allocation of labor supply across activities does not
matter(2’).
The public good is patrol(2’); the private good is fruit(2’).
Recall that efficiency requires MRSTARZAN + MRSJANE = MRT(2’). MRSTARZAN =
MRSJANE = 2(2’). But MRT = 3(2’). Therefore, MRSTARZAN + MRSJANE  MRT.
(2’) To achieve an efficient allocation, Cheetah should patrol more. (4’)
2. Answer: The use of the drug to treat sick cows leads to a positive externality (the
benefit enjoyed by air travelers) as well as a negative externality (the costs created
by a larger number of rats and feral dogs). (6’)
Banning the drug might raise or
lower efficiency, depending on whether the positive externality is larger or whether
the negative externality is larger. (6’)
There are many ways to design incentive-based regulations.
Policymakers could
determine the efficient level of drug usage and then either allocate or sell the right to
use the drug for sick cows. (8’)
3. Answer: The imposition of a payroll tax has no effect on employment when the
supply of labor is perfectly inelastic, as shown below. (2’) If, on the other hand, the
supply of labor is upward-sloping, the imposition of a payroll tax would cause
equilibrium employment to fall, and cutting the tax would then have a positive effect
on hiring, as suggested by the editorial. (2’) It is realistic to assume that, although
labor supply is inelastic, it is not perfectly inelastic. (2’)
Wage
Rate per
hour
SL
W1
W
2
DL
D’L
L1 = L2
Hours per year
(5’)
The next graph shows an upward-sloping supply, and illustrates how the tax
reduces equilibrium employment. (2’) Cutting the tax would cause the demand
curve to shift back to the right, toward the original demand curve, and cause
equilibrium employment to move back toward L1. (2’)
Wage
Rate per
hour
SL
W1
W
2
DL
D’L
L2
(5’)
L1
Hours per year