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PUBLIC FINANCE WORKING PAPER 2013 1. Please briefly explain the difference between positive economics and normative economics using the figure that illustrates market supply and demand for a given good x. 2. Please briefly explain the effect of taxes on producers. 3. Please briefly explain the effect of taxes on consumers. 4. Please briefly explain the inefficiency caused by a tax on consumers/producers. 5. Please briefly explain the effect of a subsidy on consumers. 6. Please briefly explain the inefficiency caused by a subsidy on consumers/producers. 7. Please briefly explain the effect of regulations on consumers/producers. 8. Please define public goods and services. What are the main charecteristics of public goods and services? 9. Please explain the allocation of sources between public and private goods in the economy using production possibility curve. 10. Please explain the similarities/differences between public, quasi-public and private goods with the box diagram. Please give examples for each. 1. What are externalities? Please explain with examples. 2. Please explain how the excessive production of steel yields negative externality by using a diagram. 3. How do private markets respond to externalities? Please explain these private remedies by giving examples for each. 4. What is the Coase Theorem? Please explain briefly with an example. 5. What are the main failures of these private remedies for externalites? Please explain briefly by giving examples for each. 6. What are the public sector solutions to externalities? Please explain market-based solution regarding internalizing negative externalities. 7. What does corrective tax mean? How can this mechanism be used as a tool of reducing negative externalities? 8. What are the public sector solutions to externalities? Please explain market-based solution regarding internalizing positive externalities. 9. How does the public