Question

1. Do you agree with the Organic view of government or the Mechanistic view of government? Explain your reason.

2. There is a political discussion about building a wall in the southern border of the US. What is the opportunity cost of building a wall? What is the opportunity cost of not building a wall?

3. Some people want the US government provide more services to general public like building roads, schools, and providing health care while other people disagree. What do you think? is the size of the US government too large, too small, or just about right? (use both total expenditure and total revenue as measures of the size of the government).

4. What do you think about the size of national debt? It ca be reduce either by increase taxes, decreasing government expenditure such as social services and defense, or by a combination of increase in taxes and decrease in government expenditure. What policy do you recommend to lower the size of national debt?

5. What is public sector economics? Explain. Who introduced public sector economics for the first time and won a Noble Prize in economics for his contribution.

Answer 1

1.The view to which to adhere depends on the government in power and how do you define the Social well being. I intend to answer in preference of the Organic view assuming a benevolent government. Then the government in the process of maximizing social well being maximizes individual well being as well in the process.

2.The Opportunity Cost of building the wall is the benefit which could have been received had the resources used (monetary or physical) for building the wall been used for some other purpose instead of the wall. The opportunity cost of not building the wall is to bear with insecurity.

3.The government has appropriate fiscal policies to use to match its revenue and expenditure. The social infrastructure has to be provided and human capital has to be developed by the government if it can properly manage its debt and finances, as it will promote economic development.

4. I recommend reducing fiscal profligacy and also appropriately targeted tax raise.

5. Public Sector Economics deals with the management and efficient use of public resources ensuring debt sustainability. The Nobel Prize recipient was George Stigler .