Chapter_01_v2 (1)

Public Finance

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Part 1 – Getting Started Instructor’s Manual to accompany Public Finance, Ninth Edition, by Harvey S. Rosen and Ted Gayer Suggested Answers to End-of-Chapter Discussion Questions Some of the questions have no single “correct” answer – reasonable people can go off in different directions. In such cases, the answers provided here sketch only a few possibilities. Chapter 1 - Introduction 1. a. McCain’s statement is consistent with an organic conception of government. Individuals and their goals are less important than the state. b. Locke makes a clear statement of the mechanistic view of the state in which individual liberty is of paramount importance. c. Chavez’s statement is consistent with an organic view of government. The individual has significance only as part of society as a whole. 2. Libertarians believe in a very limited government and are skeptical about the ability of government to improve social welfare. Social democrats believe that substantial government intervention is required for the good of individuals. Someone with an organic conception of the state believes that the goals of society are set by the state and individuals are valued only by their contribution to the realization of social goals. a. A law prohibiting receiving compensation for organ donation would be opposed by libertarians, as they would want the market to decide who buys and who sells organs and at what price the organs would be sold. Social democrats also might oppose the law if they consider that such a law would prevent organ donation from happening as frequently. However, they are likely to support the law on the grounds that paying for organ donation would coerce financially desperate people to sell their organs. The law would protect the individual from making a poor decision. The organic view might also oppose the law because the society might become healthier if more individuals received transplants, although they would believe that individuals should donate for the good of society, rather than for compensation. b. Libertarians oppose the law mandating helmet use for motorcyclists, arguing that individuals can best decide whether or not to use helmets without government coercion. Social democrats take the position that the mandate saves lives and ultimately benefits individuals. The organic view would probably lead to favoring the mandate on the grounds that reduced health care costs caused by fewer injuries benefit society.
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Chapter_01_v2 (1) - Part 1 Getting Started Instructors...

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