Theory Public of Finance — DU B.A. (Hons.) Economics Previous Year Question Papers

1. (a) Define Pareto Efficiency. Using an Edgeworth Box diagram identify Pareto Efflcient and pareto Inefflcient Allocations. (9) (b) Elaborate upon the need of the Public Sector and explain its major functions. (9) 2. (a) Discuss the Role ofGovemment when Markets are not pareto Efficient? (9) 3. (a) Derive an Individual's Demand Curve for Public Goods based on his Optimal Consumption choice across Private Consumption and Consumption of Public Goods at different Tax prices. (9) a) Explain how does common Resource problem leads to overconsumption. (9) 4. (a) What is the Ability To Pay Principle of Taxation. Elaborate upon choice of base under Horizontal Equity. (9) 5. (a) Explain three tools using which the Federal Reserve/ Central Bank controls the Money (b) What are the effects of a Tax on a Consumer of a good under Partial Equilibrium Analysis. Explain in context of Excess Burden imposed by Excise Tax. (9) 6. (a) Derive Equilibrium Output condition for a Three-Sector Economy using Saving/Investment Approach. (9) (b) Define Money and explain its three functions. (9) 7. Write short notes on any three: (a) Coase Theorem (b) Equal Sacrifice Rule (c) Free Rider Problem (d) Direct and Indirect Taxes (e) Balanced Budget Multiplier (3 × 6 = 18) (9) b) Tu Absolute 31t a (Differential) 7* T (Tax Incidence) st (a) mọ a (Coase Theorem) # {a fa (Equal Sacrifice Rule) (c) # {|$S} HE (Free Rider Problem) (d) ra * 3{a d (Direct and Indirect Taxes) (e) Fig de d (Balanced Budget Multiplier)