Econ 31, Public Finance.
Instructor Jose-Victor Rios-Rull
Last Revised, Monday, May 8, 2000.
Jose-Victor Rios-Rull
429, McNeil Bdg,
Tfn: 215 8987767
Fax: 215 5732057,
or 215 573-4217
http://www.ssc.upenn.edu/~vr0j/31econ/
Department of Economics
University of Pennsylvania
3718 Locust Walk
Philadelphia, PA 19104
USA
Announcement
We have a date for the final exam. It is as we talked
Wenesday May 10 from 6:30pm to 8:30pm. The exact location is
Stiteler Hall, B26.
- Classes are MW 5-6:30PM STIT B26.
- Off Hours: Wed 10:30 to 11:30.
What is in this page?
- This page contains material that is relevant for
the Course. It will grow with the semester. Students
should check it from time to time.
-
- It will include some information that may be useful
such a description of the contents of each class, a
list of material for each quiz or exam, any information
about guests that we may have and so on. It also
includes the syllabus and grading and textbook
information. I try to date the changes place the
latest changes. Specifically there is
-
Prerequisites.
- Compulsory: Econ 1 and Econ 2.
This prerequisites are compulsory. There is no point in
taking Econ 31 without having completed Econ 1 and Econ
2.
Recommended: Econ 3 and Econ 4.
Econ 31 will be followed more satisfactorily after Econ 3
and 4 are taken. Although these are not a required
requisite it is better if those courses are taken before
Econ 31. As the department puts it succinctly in the Spring 2000 Course Descriptions
"While Econ 3 & 4 are not prerequisites for other
upper level courses below the 100 level, we have found that
students who have taken Econ 3 & 4 tend to get better grades
in these upper level courses."
What are we doing each day besides
reviewing the material of the previous day.
We went over the homepage contents. We also talked about
the following chapter 1 topics
- Individuals society and the government.
- The allocation of resources between
government and private use. How government goods and
services are distributed.
- The mixed economy, markets, and politics. Circular
flow in the mixed economy.
- Government expenditures in the U.S.
- Growth of government expenditures.
- The structure of federal
government expenditure in the U.S.
- State and local government spending.
The second day.
We finished looking at the main contents of chapter 1 and
started with its appendix, we went over the
following topics
- International view: How much government?
- State and local government spending.
- Financing government expenditure in the
U.S.
- Public policy perspective The graying of
America. Implications for the federal government
budget.
- The political process operates partly to solve
market failures partly to let groups improve their
well being at the expense of others.
- We also discussed a little social security and
whether there is any notion of fairness that we can
use to think about it.
- Appendix. Preferences.
- Indifference Curve Analysis.
- Assumptions about preferences.
- Indifference curves and
indifference maps.
- The budget constraint.
- Consumer equilibrium
- Changes in income.
The Third day.
- We continued with the appendix to chapter 1.
- Indifference curve analysis.
- Changes in prices.
- Income and substitution effects of
price changes.
- The law of demand.
- Price elasticity of demand
- Consumer surplus
- Using indifference curves to
explain the allocation of time.
- We started chapter 2. We looked at the the notions
of positive and normative economics.
The Fourth day.
- We finished the appendix to chapter 1.
- Analysis of Production and Costs.
- Isoquant analysis.
- Costs.
- Profit maximization, competition and supply.
- Perfect competition.
- The short-run supply curve.
- Producer surplus.
- Long-run supply.
- Price elasticity of Supply.
- We continue with chaper 2, looking at the notion of
efficiency, o Pareto optimality that is based on an
individualistic ethic. We pointed that efficiency
requires exhaustion of all individual trades. We
discussed why does the U.S. governments (as well as
all others) outlaw certain types of trades (body
parts, gamblling, prostitution and others).
The Fifth day.
- We continued with chapter two. In particular we
discussed the notion of efficiency. How to characterize
efficiency with the notions of total social cost and
total social benefit. We also looked at the fact that
markets, if they operate well, achieve efficiency. As
a discussion topic we had what is the base for the
Phillies argument that the city should help pay for
its stadium.
The Sixth day.
We finsihed chapter 2, but not its appendix. We discussed
what does it take for the markets to achieve efficiency. We
looked at the utility possibility frontier, and we
looked at the inefficieny implied by taxation using
graphs. We also discussed the trade-off between efficiency
and equality and the notion of compensation criteria.
The seventh day.
We went over the appendix of chapter 2 and gave general
equilibrium versions of the notions of efficiency and of
why markets under certain conditions achieve
efficiency. We also had the first quiz.
The eighth day.
We started Chapter 3. We had a preliminary talk on the
issue of recycling. We then posed the study of
externalities. We looked at an example, and we calculated
the optimal tax that restores efficiency in the market. We
also did a graphic analysis that shows the efficiency gains
and losses from a market with and without the corrective
taxation in the presence of an externality.
The ninth day.
We continued with chapter 3. We
discussed the boxes: recycling, rights to pollute and
the existence of international externalities. We also
discussed the Coase Theorem.
The tenth day.
We finished chapter 3 and started chapter 4 about public
goods.
We then discussed how standards missallocate resources by
imposing the same type of behavior on all agents. We reviewed
this material using graphs. With respect to chapter 4, we
started defining public goods, then we provided a distinction
of different types of goods and we drew graphs for their
marginal costs int terms of both more people and more units
of the good. We then reviewed how to add demand curves of
households and we showed how different this is between public
and private goods.
The eleventh day.
You should try to solve the 4 problems at the end of chapter
3 and read the 2 boxes of chapter 4.
We finished chapter 4, Public goods. We looked at the
conditions for efficiency with public goods and noted how
different from those related to private goods and the fact
that the market does not achieve efficiency. We also
discussed the notion of Lindahl equilibrium and how it
manages to achieve efficiency. We then discussed the problems
to implement in practice the Lindahl equilibirum due to the
fact that people have an incentive to lie and free ride. We
saw that in small groups, knowledge of each other can solve
the problem of how to induce people to tell the truth. We
also saw how clubs are a form to solve the public goods
problem and discussed the fact that towns act as clubs when
determining the type of schools to have. We then pointed to
the fact that if these problems persist then the government
will determine the level of the public good and its financing
through compulsory taxation.
The twelfth
day.
We started Chapter 5: The political equilibrium that
looks at how the political process determines outcomes. We
looked at how to compute a majority rule outcome.
The thirteenth
day.
We discussed the problemss associated to cycling in majority
rule when preferences are not single peaked. We also talked
about the problems of several rules, including the unanimity
rule used in juries. We discussed the Rawlsian notion of
justice and fairness and Arrow's impossibility theorem.
The fourteenth
day.
We did finish Chapter 5, The
political equilibrium. We covered political parties and said
that they were more than just pure labels: they channel funds
in excahnge for coordination of policies. We also looked at
pressure groups. We started with the second part of the
course, the problem of time consistency and optimal policy
design.
The fifteenth day.
We reviewed one of the problems
askes as a homework. It took most of the class. We started
discussing time inconsistency. Recall that this
part is not in Hyman's text. Click here to find where the material is.
The sixteenth
day.
We discussed a little bit both
time inconsistency and what is the meaning of a Ramsey
policy, this is a policy that is the best that of all
possible policies. We then had the test.
The seventeenth
day.
We constructed an example of a
benevolent government that has to collect revenue from
taxation. We looked at the problem that it faces under
commitment and we called it the Ramsey equilibrium. Then we
pointed out that if there is no commitment and if after some
time passed the government were to reoptimize, the solution
would be different. This is what we refer to as Time
inconsistency of the optimal policy. We then showed how the
private sector, perfectly forecasting the behavior of the
government will take preemptive action which will lead to a
much worse outcome.
The eighteenth
day.
We wrapped up the Time
Inconsistency part and started with Part C of the course,
Principles of Government Finance.
The nineteenth
day.
We discussed issues in taxation
like what is the tax base, what are porportional, progressive
or regressive taxes. We talked about principles of taxation,
and the trade off between efficiency and equality. We went
over tax evasion and tax avoidance. We also looked at the
boxes and talked about lotteries.
The twentieth day.
We discussed in detail the
notions of excess burden of taxation with the aid of graphs
with indifference curves and budget lines and with graphs
with supply and demand curves.
The twenty first day.
We we talked about inequality
in the U.S. and we talked about Ricardian proposition and
deficits and how to measure them.
The twenty second day.
We talked about limits to the the
Ricardian proposition and we had the test.
The twenty third day.
We started chapter 6 about
cost benefit analysis. We talked about what a program is. We
also talked about program budgeting and cost
effectiveness. We use theory to derive rules for choosing
between programs. We also looked at cost-benefit analysis,
that uses present value calculations. We talked about the
fact that you should answer all the problems of chapter 6.
The twenty fourth day.
We continued talking about cost
benefit analysis and its differences with the private use of
present value calculations, in particular with regard to the
interest rate that is used. We also talked about how to
measure life and death, a particularly difficult thing to do.
We started talking about poverty, chapter 7.
The twenty
fifth day.
We went over chapter 7 about
government subsidies and income support for the poor. We
talked about why does the U.S. have these policies and how
they are implemented. We talked about the poverty line. We
also talked about the huge incentive problem. We talked at
the excess burden of subsidies, and we look at the different
changes in the budget constraint that these policies
imply. We talked also about what type of logic could be
behind something other than transfers in cash.
The twenty sixth
day.
We finished chapter 7 and went
over chapter 8, "Social Security and Social Insurance". We
talked about replacement rates, gross and net. We
distinguished between PAYG and FF social security systems. We
look at a simple model where the differences between the two
system become clear. We also looked at the role of
demographics in shaping social security. We discuss what type
of principles could be behind the system.
Next day, The twenty
seventh day.
We will finish chapter 8 and go
over selected topics of chapter 9 about Government and Health Care.
Day after Next, The
twenty eighth and final day.
This will be just a review session
were the students will raise their questions.
Course Description
- What the course is about.
This
is a course on the role of the government in the
economy.
- How is the course organized.
In principle, there will be lectures according to the plan
I list just below. However, this is the first time I teach
this course, so there may be small adjustments of the
content. In principle, I wish to adhere to the plan.
- Class discussion.
This is supposed to be a small section. The rationale for
this is that class discussion is highly encouraged. The
discussion will be centered around the material that we
learn. The role of the government is at the center of most
political discussion, so a course in public finance cannot
ignore political disagreements. We will try to keep the
discussion under focus so that we can distinguish what is
it that are opinions and what are economic theory or
economic facts. As noted, the quality of class discussions
contribute 10% to the grade.
- Course Contents (this may change).
In principle the content of the course is very much in line
with that of most of Hyman's textbook, including the
appendices. The detail with which the contents are depicted
will increase with time. I will try to accurately reflect
the content of the lectures so that the syllabus does
reflect what the course is about with utmost
accuracy. For example, as of now only the first chapter is
described in detail. The plan is to include as much detail
in the syllabus on the material that we actually
cover. Occasionally, I would point to additional
material from here.
- A. The Economic Basis for Government
Activity. (Chapters 1-5).
- Individuals and the Government. (Ch 1).
- Individuals society and the government.
- The allocation of resources between
government and private use. How
government goods and services are
distributed.
- The mixed economy, markets, and
politics. Circular flow in the mixed
economy.
- International view: How much government?
- Government expenditures in the U.S.
- Growth of government expenditures.
- The structure of federal
government expenditure in the U.S.
- State and local government spending.
- Financing government expenditure in the
U.S.
- Market failure and the functions of
government: How much government is
enough?
- Public policy perspective The
graying of America. Implications
for the federal government budget.
Appendix to Chapter 1. We will review
these concepts as we need them, some of it
later in the course.
- Indifference Curve Analysis.
- Assumptions about preferences.
- Indifference curves and
indifference maps.
- The budget constraint.
- Consumer equilibrium
- Changes in income and prices.
- Income and substitution effects of
price changes.
- The law of demand.
- Price elasticity of demand
- Consumer surplus
- Using indifference curves to
explain the allocation of time.
- Analysis of Production and Costs.
- Isoquant analysis.
- Costs.
- Profit maximization, competition and supply.
- Perfect competition.
- The short-run supply curve.
- Producer surplus.
- Long-run supply.
- Price elasticity of Supply.
- Efficiency, Markets and Governments. (Ch 2,
including appendix).
- Positive and Normative Economics
- Normative Evaluation of Resource Use: The
Efficiency Criterion
- Marginal Conditions for Efficiency
- Markets, Prices, and Efficiency Conditions
- When Does Market Interaction Fail to
Achieve Efficiency?
- Monopolistic Power
- How Taxes Can Cause Losses in Efficiency
in Competitive Markets
- Public Policy Perspective: The Tax
System and the Birth Rate -- An Example of
Positive Economic Analysis
- How Government Subsidies Can Cause
Losses in Efficiency
- Market Failure: A Preview of the Basis for
Government Activity
- Equity versus Efficiency
- The Tradeoff between Efficiency and
Equity: A Graphic Analysis
- The Tradeoff between Equity and
Efficiency in a System of Competitive
Markets
- Positive Analysis Tradeoff Between
Equity and Efficiency
- International View: Agricultural
Subsidies, International Trade Restrictions,
and Global Efficiency
- Externalities and Government Policy.
- Externalities: A Classification and
Some Examples
- Externalities and Efficiency
- Negative Externalities
- Positive Externalities
- Internalization of Externalities
- Corrective Taxes: A Method of
Internalizing Negative Externalities
- Internalizing Negative
Externalities Associated with Goods
Sold in Imperfectly Competitive
Markets
- Corrective Subsidies: A Means of
Internalizing Positive Externalities
- Property Rights to Resource Use and
Internalization of Externalities: The
Coase
- Theorem
- Exchange of Property Rights to
Internalize a Negative Externality: An
Example
- Illustrating the Coase Theorem
- An Alternative Property Rights Assignment
- Significance of the Coase Theorem
- Applying the Coase Theorem: Pollution Rights
- Efficient Pollution Abatement Levels
- Public Policy Perspective: Recycling
- Environmental Protection Policies in
the United States
- Emissions Standards versus Corrective Taxes
- Command and Control Policies and
Environmental Quality
- Public Policy Perspective:
Marketable Pollution Rights for
Electric Power Generation
- More on Market-based Approaches to
Pollution Control:
- How Trading Pollution Rights
Can Reduce the Cost of
- Environmental protection
- International View: Global
Pollution -- Externalities that Cross
Borders
- Public Goods.
- The Characteristics of Public Goods
- Pure Public Goods and Pure Private Goods
- An Example: Bread versus Heat
- Provision of Private Goods and Public Goods:
Markets and Government
- Congestible Public Goods and Private
Goods with Externalities
- The Demand for a Pure Public Good
- Efficient Output of a Pure Public Good
- A Numerical Example
- Public Policy Perspective: Defense
Spending in the United States and the "Peace
Dividend"
- A Cooperative Method of Efficiently
Supplying Pure Public Goods: Voluntary
Contributions and Cost-Sharing
- The Lindahl Equilibrium
- Generalizing the Results
- The Free-Rider Problem
- Compulsory Finance
- Public Choice and the Political Process.
- The Supply of Public Goods through Political
Institutions: The Concept of Political
Equilibrium
- Political Equilibrium
- Elections and Voting
- To Vote or Not To Vote
- Determinants of Political Equilibrium
- A Model of Political Equilibrium under
Majority Rule
- Election Results under Majority Rule
- The Median Voter
- Uniqueness and Cycling of Outcomes under
Majority Rule
- Single-Peaked and Multiple-Peaked Preferences
- Pair-wise Elections: The Phenomenon of Cycling
- The Cause of Cycling
- Existence of Multiple-Peaked Preferences
- Public Policy Perspective -- Public Choice
in U.S. Cities: Political Institutions
Matter
- The Political Process
- Constitutions
- A Classification of Collective Choice Rules
- Minority Rule
- Majority Rule
- Choice of the Collective Decision-making rule
- Costs and Benefits of Collective Action
- Unanimous Consent
- Relative Unanimity and the Rights of Minorities
- Plurality Rule
- Point-Count Voting
- Politicians, Logrolling, and Bureaucracy
- The Median Voter, Political Parties, and
Political Equilibrium under Majority Rule
- The Effect of Nonvoting on Political Equilibrium
- Voting on More than One Issue at a Time: Logrolling
- Implicit Logrolling
- Logrolling and Efficiency
- Special Interest Groups and Their Impact on
Political Equilibrium
- International View -- Tariffs and Import
Quotas on Textiles and Apparel in the United
States: Special Interest Groups in Action
- Bureaucracy and the Supply of Public Output
- Bureaucratic Behavior.
- B. Time consistency and optimal policy. Chari's
paper. Time Consistency and Optimal Policy Design
- C. Principles of Government Finance. (Chapters
10-12)
- D. Government Expenditures and Policy in the
U.S. Various Issues. (Chapters 6-9)
Calendar.
- There are regular lectures on every foreseeable
Monday and Wednesday.
Usual place.
What about textbooks?
- The textbook of the course is Public
Finance by David N. Hyman, Sixth Edition, from
Dryden Economic Press.
Any need for any other material will be posted here.
Vol. 12 No. 4 | Fall 1988. | Time Consistency and Optimal Policy Design A set of notes by V.V. Chari.
Problem Sets
- Here I will post problem sets or questions and
after a suitable amount of time their solutions.
- The demand for good x is x=500-2p. The supply of
that good is x=10p. Assume that the marginal private
benefit equals the marginal social benefit, but the
marginal private cost is $5 lower than the marginal
social cost.
- a. Compute the market price and quantity.
- b. Compute the efficient quantity.
- c. Compute and draw the efficiency loss in the
market.
- d. Calculate the tax that yields the efficient
allocation.
SOLUTIONS
- a. It is the quantity and price where supply
equals demand, that is, p=41.66, x=416.66.
- b. It is where the marginal social cost equals
the marginal social benefit. This happens when
the marginal external cost is added to the
marginal private cost to obtain the marginal
social cost. MSC=MPC+MEC=p+5=10x+5. x=408.33.
- c. The area is the area of the triangle ABC in
the graph. Its value is (416.666-408.333)*5/2=
20.833. See graph but do not
trust the numbers posted in it in point C
- d. Five dollars per unit.
- Do problems 1-4 of chapter 3 of the book.
SOLUTIONS
1. P = $66.67 per ton and the quantity sold is
333,350 tons per year when sold in a competitive
market. To calculate the efficient output of paper add
$20 to the demand price in the second equation and
re-solve for the efficient price. The efficient price
is $83.33 and the efficient quantity is 316,670 tons
per year. A corrective tax of $20 per ton can achieve
the efficient output.
2. The demand curve is obtained by plotting the
data for MPB on the vertical axis and plotting quantity
on the horizontal axis. The difference between the
marginal social benefit and marginal private benefit is
the MEB. At a price of $25 per gallon the market
equilibrium is not efficient because there is a
marginal external benefit of $6 when 30 million gallons
are sold per year. At a $15 price the marginal
external benefit is zero and the market
equilibrium is therefore efficient.
3. a. The cost of meeting the standards is obtained
by multiplying cost per ton for each plant and summing
the results which gives $220,000 per year.
b. The least cost method would be to have plant 5
reduce its emissions by 500 tons per year which would
cost only $100,000 per year
4. At a $450 per ton charge Plants 4 and 5 would
cut back emissions at a total cost of $60,000. Plants
1,2,3 would find it cheaper to pay the $450 fee rather
than cut back emissions. The total revenue generate
buy the purchase of the pollution rights by these firms
for the 300 ton reduction in annually emissions would
therefore be $135,000.
- Try to do problems 1-4 of chapter 4 of the book.
SOLUTIONS
2. At less than 50,000 vehicles per hour no toll is
required to achieve efficiency. When traffic rises
above 50,000 vehicles per hour the toll should be set
at the marginal congestion cost.
3.a. The demand curve shows how the sum of the
marginal benefits of all consumers varies with the
number of concerts.
Number of Concerts íMB
1 $975
2 $700
3 $425
4 $250
b. At a marginal cost of $1000 it is efficient not
to hold any outdoor rock concerts at all. At a
marginal cost of $425, the efficient number of concerts
per summers is 3.
4. The efficient number of concerts would be 4 and
John would be charged $75, Mary would be charged $50,
while Loren would pay $25 for each concert.
- Try to do problems 1-2 of chapter 5 of the book.
SOLUTIONS
1. a. If each resident had to buy landscaping
services as a private good in the market no gardeners would
be hired because the marginal cost of $350 for the first
gardeners exceeds the marginal benefit of $100 for any single
resident. The arrangement is inefficient because the sum of
the marginal benefits of the first gardener is $700 which
exceeds the marginal cost of $350.
b. At a tax share of $50 per gardener we know that each
voter will want at least one gardeners. We also know that at
a $50 tax share that the community will collect enough
revenue from the 7 residents, $350, to just cover the cost of
one gardener. The political equilibrium will therefore be
one gardener for the community. However, because the sum of
the marginal benefits of the first gardener is $700, the
equilibrium is less than the efficient number of 3 which
would prevail under the Lindahl equilibrium. Under a Lindahl
equilibrium each voter would have a higher tax share than $50
but each would demand three gardeners at that tax share.
2. A $60 transaction cost for voters A and C would have
to be subtracted from their marginal benefit. After the
subtraction both A and C would vote against one security
guard and fireworks display per week because their net
marginal benefit of only $190 each which would be less than
their $200 tax share. Similarly voter A would vote against
the combined public good if his marginal benefit from the
first security guard were only $150 because this would be
below the $200 tax.
- Do all problems of chapter 6
of the book.
SOLUTIONS
1. The ratio of the price of the highway interchange to the
price of the cardiac intensive care unit is 2. The ratio of
the marginal products of the two programs and their current
output levels is 10/3= 3.33. Because the ratio of marginal
products exceeds that ratio of prices the current mix of
programs is not cost-effective. To improve
cost-effectiveness more highway interchanges should be built
and few cardiac units should be produced. As this occurs the
marginal product of highway interchanges will fall while the
marginal product of cardiac units will rise. Cost
effectiveness is achieved when the ration of marginal
products is adjusted to equal 2.
2. There is a $1 per trip cost saving on the existing
500,000 which provides a benefit of $500,000 per year. The
gain in net benefits from the 100,000 new trips is 1/2
($1)(100,000)= $50,000 per year. The annual increase in
benefits to motorists as a result of the new road will
therefore be $550,000.
3. The opportunity cost of funds to finance the investments
will be 16% which is the equilibrium gross return of airlines
required to give a new return of 8% which is the opportunity
cost of capital in the economy. Because the project will
yield only 12% there will be no increase in net benefits
because the opportunity cost of funds exceeds the return on
the project.
4. The net present value of the project at a 10% discount
rate is -$1.98 million. The project therefore does not merit
approval. Because it has a negative net present value at a
10% discount rate it will also have a negative net present
value at the higher interest rate of 15%.
- Do problems 1 and 2 of chapters 7 and 9
of the book.
SOLUTIONS
Chapter 7.
1. The supply of bread after the subsidy will be perfectly
elastic at 50 pesos per loaf. In equilibrium the price of
bread will fall to 50 pesos. At the price the marginal
benefit of bread will be 50 pesos to consumers and the
equilibrium quantity demanded. The marginal cost of
producing bread will be 100 pesos. Because there are no
externalities this implies that the marginal social cost of
bread will exceed the marginal social benefit and more than
the efficient amount will be produced. The subsidy lowers
the market price of bread so all consumers of bread, nonpoor,
as well as poor, will benefit.
2. The analysis here is similar to that for food stamps.
Assuming that the person would spend at least $200 per month
on housing anyway, the $200 subsidy would have the same
effects as a $200 cash transfer. A recipient that would have
chosen to spend less than $200 per month on housing if given
a $200 cash transfer would be better off with the cash
transfer.
Chapter 9.
1. a. The total market value of the health insurance
provided for the 1000 workers is $3,000,000 per year. If
this were paid as taxable as income to employees, government
would collect 30 percent of that sum in taxes which amounts
to a subsidy of $900,000 for health insurance to the workers.
b. Each worker would have to pay for the policy out of
taxable income. This means that the typical worker in the 30
percent tax bracket would have to earn $4286 which would give
the employee $3000 after taxes to pay for the policy. The
typical worker would be worse off and would be likely to
decrease the amount of health insurance demanded. Even if
the employer provided the worker with $3000 of additional
taxable compensation to adjust for the loss in $3000 worth of
fringe benefits, the workers would be worse off compared to
when they received $3000 worth of nontaxable health
insurance.
Do ont worry about problem 2.
Exams and quizzes dates and
contents with solutions to the old ones.
- There are three 45 minute quizzes and one final
exam. The times and locations are:
- First quiz. February 7. During the class. The
material to cover is everything we have seen in
class until February 2.
- Chapter 1 of Hyman's text and its appendix.
- Chapter 2 of Hyman's text but not its
appendix.
- We will also include some of the discussions
that we have had in class over specific topics.
1st Quiz with answers
(2/9/00)
The mean grade was 27.4.
- Second quiz. March 8. During the class. The
material to cover is everything we have seen in
class until March 6.
- Chapters 1 and 2 enter but marginally.
- Appendix to Chapter 2 of Hyman's text.
- Chapter 3 of Hyman's text.
- Chapter 4 of Hyman's text.
- Chapter 5 of Hyman's text.
- We will also include some of the discussions
that we have had in class over specific topics.
2nd Quiz with answers
(3/20/00)
- Third quiz. April 5. During the class.
The material for the quiz will be time inconsistency,
chapters 10 and 11 of the text and whatever fraction
of chapter 12 we cover on Monday April 3.
3rd Quiz with answers
(4/10/00)
- The time and location of the final will be announced
at a later date.
Grading Rules
- Course Grading Guidelines
Under department guidelines, grades of “A-” and higher
will be limited to roughly 30% of the students and grades of
“B-” and higher will be limited to 67%.
Examinations and
Quizzes
Questions for the exams will be based primarily upon the
professors’ lectures. Material and questions from the
Hyman text, the Study Guide, and the additional readings
that may be posted will also be a basis for exam
questions.
Exam and quizzes.
There will be three 45 minute quizzes and one final
exam. The times and location are:
- First quiz. February 7. During the class.
- Second quiz. March 8. During the class.
- Third quiz. April 5. During the class.
- The time and location of the final will be announced
at a later date.
All students are required to take all three of these
examinations and should not schedule conflicting
classes.
Please note: Failure to make transportation arrangements
sufficiently early, so as to have the option of
traveling after the Economics 1 or 2 examination, is NOT a
valid reason for taking the make-up for the final
examination. If you have not already done so, SEE YOUR
TRAVEL AGENT NOW.
Determination of
Grades.
Grades will be awarded on the following basis. Each quiz is
18% of the grade. The final is worth 36% of the grade and
the remaining 10% is based on class discussions.
Under no circumstance, you may negotiate your grade. In
case you believe that your bluebook is improperly marked, you
should request in writing re-grading of the bluebook stating
precisely the motives of such request within a week after the
bluebook is returned. Then, the whole exam will be regraded
by a different person, so your grade can go up, remain
unchanged, or go down. There is no room for further
complaints. This system ensures that grading mistakes are
corrected, but that persistent complains do not improve the
grade. The grades will only be given under the standard
procedures of the University of Pennsylvania, and not
individually. The bluebooks of the midterms will be handled
in class.
Students taking Economics 31 on a Pass/Fail basis must
meet all of the requirements of the course (including the
final examination).
Guest Stars
Here, I will list our confirmed guest stars, to talk
about topics that they know well.
Get to know your government.
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