Part I: Please write one paragraph with solid explanations in response to each of the following four questions.
Please write one paragraph for each of the following:
a) Discuss the relationship of Public Choice and Voting and explain the Voting Paradox problem that can arise.
b) Discuss the properties of Public Goods and the Free-Rider Problem that can arise in the provision of those public goods and service.
c) Public goods tend to be ones that are Non-Rival and Non-Excludable in consumption. Explain what the characteristics imply and provide an example of each in your discussion.
d) Explain the difference between a Subsidy (for consumption) and a Tax (on consumption), discussing when a government may want to use one of these tools in a particular market.
Part II: Please compose three full paragraphs (one page single spaced) with any graphical or technical analysis as appropriate for each question.
2) Explain how either the Coase Theorem or the Compensation Principle might help in the following situations?
a) One neighbor in a subdivision who does not maintain his/her property and makes it less attractive to everyone (and reduces adjacent property values).
b) Conflict between those who want more street lights for safety and those who like dark streets at night because the light does not keep them awake.
c) Access to a limited supply of potable water that households want to use but that farmers would like for irrigation.
d) Allocating an unexpected increase in local government revenue for street improvements.
3) Explain what the efficiency, equity and administrative advantages are of a means-testing system that phases out eligibility as household income approaches a certain limit instead of just stating that the every household below the limit is eligible and those above are not? [Please focus your discussion on the economic reasoning for doing so.]
4) Colleges engage in price discrimination among students with scholarships and other aid packages. Among the types of discrimination are those based on income (ability to pay or need), ability (SAT scores), and athletic skills. What is the economic rationale in terms of appropriate public subsidy for each type of student considering equity and efficiency in your answer?