Tut9 - Economics 290: Canadian Microeconomic Policy...

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Economics 290: Canadian Microeconomic Policy Tutorial #9 (Week of July 9) 1. Government is considering the following three policy options to help the poor: (1) lump-sum transfer, (2) wage rate subsidy, and (3) topping-up mechanism. Government has two objectives when choosing the income assistance programs: distribution and efficiency. (a) Which policy can effectively redistribute income without sacrificing efficiency? Why? (b) If the poor workers are equally as well off under these three income assistance programs, rank these income assistance programs in terms of work incentives. Which program induces most hours worked? Which program induces least hours worked? Explain. (c) If the poor workers are equally as well off under these three income assistance programs, rank these income assistance programs in terms of government spending. Which program costs government the most amount of tax dollars? Which programs costs government the least amount of money? Explain.
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This note was uploaded on 10/12/2009 for the course ECON 290 taught by Professor J liu during the Fall '06 term at Simon Fraser.

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Tut9 - Economics 290: Canadian Microeconomic Policy...

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