Questions and Answers of Public Finance In Canada

A predecessor of the modern property tax was a tax levied on dwellings based on the number of windows they had. (The window tax was introduced in England in 1696 by King William III.) Oates and
One factor thought to contribute to the increase in social assistance recipients is an increase in the ratio of social assistance benefits to earnings for low income individuals. Using a graph like
The table below shows the value added at each stage in the production and sale of furniture.a. Fill the blanks in the table, assuming a GST rate of 5 percent.b. Repeat the calculations in part (a),
In The End of Liberalism, Theodore Lowi (1979: xii) offers the following article as part of a present-day constitution: “The public interest shall be defined by the satisfaction of voters in their
Areas of public debate that have highlighted the tension between individual rights and social control include gun control and the required registration of guns, local antismoking by laws,
High and rising health care expenditures are one important element that has contributed to provincial government deficits. New, or additional, payroll taxes may be one way to finance the higher
Proponents argue that the government guarantees on loans to students do not result in an increase in government spending since only “loans” are involved. The same claim is heard from corporations
Use the data in Table 1.1 to calculate the following: the rate of growth in total government expenditures, in real government spending, and in real, per capita spending over the period from 2000 to
Consider the data presented in the table below. Suppose that the federal government in creases grants to provincial governments by $6 billion in 2010. Does the increase in grants necessarily lead to
The government of France taxes movies that are produced outside of the country and subsidizes domestically produced movies. Is this policy consistent with a Pareto efficient allocation of resources?
Suppose that Hannah’s utility function is UH = 3T + 4C and that Jose’s utility function is UJ = 4T + 3C, where T is kilograms of tea and C is kilograms of coffee per year. Suppose there are fixed
A new health minister proposes to distribute an apple a day (at no cost) to every citizen. To be effective, the legislation states that the free apples may not be traded or sold. Explain why this
Indicate whether each of the following statements is true, false, or uncertain, and justify your answer.a. If everyone has the same marginal rate of substitution, then the allocation of resources is
A cost–benefit study indicated that the Oldman Dam project in southern Alberta had a benefit– cost ratio of 4.9 (Marv Anderson and Associates, 1978: Table 5.2, p. 103). On the basis of this
The city of Sundown is considering a plan to build a convention centre to revitalize the downtown area. The project requires hiring workers in the construction union. Because of unionization, the
A province is considering an emissions testing program for all cars in the province. The waiting time per vehicle for the emissions test is estimated to be between 15 minutes to 2 hours. How should
An outlay of $1,000 today yields an annual benefit of $80 beginning next year and continuing forever. There is no inflation and the market interest rate is 10 percent before taxes and 5 percent after
An article in the The Economist (2007) tells the story of an economist who once visited China during the rule of Mao Zedong. He saw hundreds of workers building a dam with shovels and asked, “Why
A proposed irrigation project would lower the constant marginal cost of producing rice from $1,000 to $600 per unit. The local market for rice is competitive and has a demand curve given by QD =
Which of the following do you consider public goods? Private goods? Why?a. Wilderness areasb. Prisonsc. Peace keeping in Sudand. Public television programse. An Internet site providing information on
The global positioning system (GPS) uses satellites to send radio signals that can be picked up by receivers, allowing users to determine their precise locations. The U.S. military, which operates
The owners of some commercial ships may place a higher value on avoiding dangerous shoals than do other commercial ship owners. Provide a reason why this is likely to be the case and explain how it
Moe, Larry, and Curly are struggling in their drama class and plan to hire an acting coach to help them prepare a stage show. The tutor’s wages are $20 per hour. The marginal benefit of each hour
Thelma and Louise are neighbours. During the winter, it is impossible for a snowplow to clear the street in front of Thelma’s house without clearing the front of Louise’s. Thelma’s marginal
Every year in December, the Smith family decorates their home with a lavish display of Christmas decorations. People come from all over Edmonton to look at the decorations. Consequently, the roads in
Should airport security be produced publicly or privately? Use the contracting framework to discuss this question.
Consider a hypothetical market for the hepatitis A vaccine. The market demand (or private marginal benefit schedule) is given as: P = 80 - 0.25Qd where Qd denotes the number of vaccinations demanded
For each of the following situations, is the Coase Theorem applicable? Why or why not?a. A group of university students in a residence shares a communal kitchen. Some of the users of the kitchen
The government of British Columbia has suggested a “cash-for-clunkers” program. Under this program, the government would buy up “clunkers” (older cars that emit a lot of pollutants and do not
For each of the following, discuss the nature of the externalities involved and possible government responses:a. The outbreak of SARS (sudden acute respiratory syndrome) in Toronto in 2003b. The H1N1
Suppose that in the absence of any corrective measures, the economy generates 750 megatonnes (Mt) of GHG emissions (E) per year. The damage created by an additional Mt of emissions is called the
Several homeowners in a neighbourhood like to plant gardens in the spring. These gardens generate external benefits for those who reside in or visiting the neighbourhood. No government intervention
Are the concepts of fairness and equality in the distribution of income synonymous? To what extent is income inequality consistent with fairness? What are the implications of your answer for
The table below shows the income shares by quintile for Canada in 2011 for different income measures.a. Calculate the cumulative income shares for all three income measures.b. Draw the Lorenz curve
“Mobility should play a bigger role in our thinking about poverty. The current standard, preoccupied with income snapshots, only echoes the current welfare formula, with its emphasis on supporting
The economy consists of Will and Grace. They have identical utility functions U = 100(yi)0.5 where the marginal utility of income function is MU = 50(yi)-0.5. The total income available in the
Will and Grace are the only two people in the economy. Will’s utility is given by UW = 100(yW)0.5 while Grace’s utility depends not only on her own income but also on Will’s utility. Her

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