be extremely poor or indigent: their level of expenditure was not high enough to enable them tosatisfy their basic food requirements. The level of poverty among the youth and elderly was 31.6percent and 27.6 percent respectively, and 32.8 percent and 33.1 percent for male and femaleheads of households. Reference Link:Do all the poor qualify for government assistance programs? NO.8. What are the possible collective benefits of government assistance to the poor? Why are inkind benefits to the poor more prevalent than cash benefits?
In response to last week’s poston private charities, one thoughtful commentator, Arthur Franke,wrote:The reason just “giving cash to the poor” is not typically a good plan is because it isoften counterproductive. Very frequently giving cash to someone does the recipientmore harm than good.It is hard to help people. Writing a check doesn’t usually do the job. If it did, thetrillions this country has spent on various income transfer programs would havewiped out poverty . . . . Instead it has simply created an ever-expanding “need” foryet more income transfer programs.There are of course cases in which money solves personal problems, but it is usuallynot so easy.In offering that comment, the writer touched upon an issue that is dear to the heart of anyeconomics professor. The question we pose to our students is this:Is it better to give people for whom one has compassion goods or services they ought to have(what we call benefits in kind), or is it better simply to give them the equivalent in cash, lettingthe recipients of our largess decide how best to spend it to maximize their happiness?Economists believe to have found a clear answer to this question, and most textbooks ineconomics proffer it, sometimes with impressive graphs. Giving cash is superior.Part B.1.The supply of paper is described by the follow equations =8,000P where Qs is tons suppliedper year and P is the price per ton.The demand is described by QD 400,000-2,000P where QD istons demand per year. Because of the pollution associated with paper production, marginalexternal costs of $20 are associated with each ton of paper. Assuming that paper is sold in a
competitive market, what is the market price? How many tons of paper will be produced per yearat that price? What is the efficient annual output of paper? How can a corrective tax achieveefficiency?
- Spring '17