ch01 - 1 Individuals and Government Chapter 1 2 Public...

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Unformatted text preview: 1 Individuals and Government Chapter 1 2 Public Finance Public finance is the field of economics that studies government activities and the alternative means of financing government expenditures. 3 Government Governments are organizations formed to exercise authority over the actions of persons who live together in a society and to provide and finance essential services. 4 Political Institutions Political Institutions are rules and generally accepted procedures that evolve for determining what government does and how government outlays are financed. 5 Examples of Political Institutions Majority rule Representative government 6 The Allocation between Private and Government Resources Private Food Housing Cars Clothing Government National Defense Public Schools Police 7 Figure 1.1 A Production-Possibility Frontier G 2 B X 2 G 1 A X 1 C M 0 Government Goods and Services per Year Private Goods and Services per Year 8 Distribution of Government Goods and Services Nonmarket rationing: Prices and willingness to pay those prices are not applicable to goods like national defense. 9...
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ch01 - 1 Individuals and Government Chapter 1 2 Public...

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