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

Department of Economics
University of Pennsylvania
3718 Locust Walk
Philadelphia, PA 19104 USA


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.

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



  • 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.

  • The first 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).

      1. 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.

      2. 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


      3. 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


      4. 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


      5. 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)



  • 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. 4Fall 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.

  1. 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.


  • 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.


    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.


    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.


    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.


    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.


    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:

      1. 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.

      2. 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)

      3. 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)

      4. 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:

      1. First quiz. February 7. During the class.
      2. Second quiz. March 8. During the class.
      3. Third quiz. April 5. During the class.
      4. 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.                                    

    Useful Links

    Get to know your government.