Public Finance - Mid-Term Weak Topics

When would we cumulate each persons WTP

When it is a public good or service that benefits everyone.

When would we keep peoples WTP separate

When the good or service is excludable or not uniformly beneficial to all. (Private Good)

What would a utilitarian perspective look like

In a utilitarian perspective, it promotes the greatest good for the greatest number, suggesting that resources should be allocated to maximize overall welfare, even if it may not benefit every individual equally.

What would a Raulistic perspective look like

A Raulistic perspective focuses on maximizing the welfare of the worst-off individuals in society, emphasizing equity and fairness in resource distribution rather than overall utility.

How would the utilitarian graph look

Data points plotted then a tangent along the plot of maximum efficiency

What would the Rawlsian graph look like

would be a right angle at the point that maximises everyone’s gains, usually around the middle

How would you work out the Private Equilibrium Quantity

Combine the PMB and the PMC and (if needed) divide by the number of Q (quantity)

How would you work out the social marginal benefit

Tale the private marginal benefit and deduct the Marginal Damage

How would you work out the efficient quantity

Take the Equilibrium quantity, and input it into the SMB and then divide by number of Q’s

How would we work out tax

Take the equilibrium quantity and input it into the PMB

What is the equation use to get the Net Present Value

(Value/ 1+R)n