Public Economics

Your answer should be typed and double spaced.
If you cite papers, cite them fully. If you would like to include graphs or images, they need to be original work or properly cited. If you would like to include personally drawn graphs, I suggest taking pictures of them and using the Insert>Pictures function of Microsoft word.

You will be graded on the correctness, completeness, and overall quality of your answers relative to the most correct answer, so it is important to do the best you can to write what you think is a great answer.

(try to use google scholar when possible AND address every part of the question as you answering it)

There are 5 questions on the exam. Pick 4 to answer.

1. Buchanan (1965) provides us with a reference for why clubs might form and how they can provide goods that are on the public-private scale. Does this mean governments are simply clubs? Why or why not? Is WVU a club or government? How does the public-ness or private-ness of goods provided potentially relate to your answers?
2. From a positive economic standpoint, where do rights come from? What is the difference between a right and an entitlement? Is healthcare a right? Consider the Bill of Rights, why is it only 10 amendments? Why might the Bill of Rights only cover those 10 topics?
3. West Virginia University has provided a monopoly to the Coca-Cola company for the sale and distribution of beverages on campus. Economic theory tells us this comes with an amount of deadweight loss and a transfer of social benefits from the consumers to Coca-Cola, at least compared to having a perfectly competitive beverage market on campus. Why might the cost to society associated with this monopoly be understated?
4. The city of Gadsden, Alabama (where Noah’s parents live) is considering replacing one of the bridges that cross the Coosa River that runs through town. The primary benefits of replacing the current bridge are reductions in commute time, traffic, and better foot traffic safety for people walking across the bridge. The expected cost of the bridge is $8 million. The expected benefits from primary sources over the coming years are $4 million immediately, and $1 million each year over the next 4 years. Discuss the cost-benefit analysis associated with this project. Is it possible to improve the cost-benefit analysis? Is anything missing from it?. Should the city go forward with the project? Why or why not?
5. Consider equality as a potential goal for society. Discuss how this could be obtained through Government action. Does the action depend on the intent to reduce poverty or increase equality? Suppose equality increasing efforts were put to a majority-rule vote by the population, “yes” meaning more equality efforts. Why might we see the vote have a different yes percent vote than the percent of the population who would prefer more transfers? Is there evidence to support that this could/does happen?