Assignment: The Economics of the Public Sector

Answer each question in a paragraph with a 200 + word counts.

1.

3. Using the mechanics of supply and demand, what does a tax do? How does it affect supply and demand and quantity in markets?

4. Consider how international trade affect economic well-being and consider who gains and who loses from free trade among countries, and how do the gains compare to the losses

5. Consider the term externalities and how it relates to the consumer. Consider the term negative externality and how it relates to the consumer. Consider the term positive externality and how it relates to the consumer.

6. Consider what is meant by the efficiency of a tax system? What can make a tax system inefficient? Explain the benefits principle and the ability-to-pay principle. What are vertical equity and horizontal equity? Why is studying tax incidence important for determining the equity of a tax system

7. Why is the shut-down price and quantity found at the lowest part of the AVC (average variable cost) curve?

Each question to be answered knowledgeable and not in short choppy answers. If this is not met the question will not be marked completed.