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Xea 401: Public Economics Question Paper

Xea 401: Public Economics

Course:Bachelor Of Economics

Institution: University Of Nairobi question papers

Exam Year:2013

University Of Nairobi
University Examinations 2013/2014
Fourth Year Examinations for the Degree of Bachelors of Economics
XEA 401: Public Economics
Date: December 10, 2013 Time: 11.30.A.M.-1.30.P.M.

Instructions:
Answer any three questions. All questions carry equal marks.

Question 1

The governance structure of the Kenyan government changed in 2010, when the country adopted and started implementing the Constitution of Kenya 2010.
i) Discuss the role of the government in the Kenyan economy taking into consideration both the county and central governments.
ii) What is the economic impact of the government interventions?

Question 2

Attempts to explain the existence of Pareto optimal equilibrium in an economy with both pure private and pure public goods have been made by various authors of Public Economics. Briefly explain the Samuelson General Equilibrium model. What are the contributions and limitations of this model?

Question 3

The following theories/models have been proposed to explain allocation of goods in different types of economies.
i) Niskanen Model
ii) Arrow Debrew equilibrium model
iii) Tiebout Model
iv) Buchanan model
v) Contemporary theory of institutions.
vi) Theories of Government Failure.
vii) Rozentah-Romer theory of Bureaucracy.

Briefly discuss any two of the above models, highlight their origin, justification, contribution and limitations.

Question 4

Write short notes on the following:
i) Government failure and market failure, what are the policy and response mechanisms for corrections?
ii) Pure public goods and impure public goods.
iii) Partial equilibrium analysis of pure public goods and pure private goods.
iv) Social choice theory and public choice theory.

Question 5

i) Define core equilibrium
ii) Using the Lindahl model explain the process of achieving core equilibrium in allocating resources between the pure public goods and pure private goods.
iii) Is the above equilibrium (ii) stable or unstable? Explain
iv) How can this equilibrium be made stable if there is instability in the economy?

Xea 401: Public Economics Question Paper

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