GoodsClassifications:Excludable canpreventpeoplefromconsumingwithoutpayingRivalinconsumption cannotbeconsumedbymorethanonepersonatthesametimeFourtypesofgoodsPrivategoods: excludableandrivalinconsumptionCollectivegoods(Artificiallyscarcegoods): excludableandnon-rivalinconsumptionCommonsgoods(commonresources): non-excludableandrivalinconsumptionPublicgoods: non-excludableandnon-rivalinconsumptionFourtypesofgoodsPrivategood(wheat)Collectivegood(pay-per-viewTV)Commonsgood(fishintheocean)Publicgood(nationaldefense)RivalNon-rivalNon-excludableExcludableFromTable16.1,P.365GoodsClassificationHW5Explainthecharacteristicsofthe4typesofgoods4types:private;collective;common;publicList5goodsthatbelongtoeachofthe4typesandexplainPrivateGoods:ExcludableandrivalinconsumptionNon-payerscanbeeasilyexcludedEachunitconsumedbyonepersonmeansonelessunitavailableforotherstheonlygoodsthatcanbeefficientlyproducedandconsumedbymarketCollectiveGood:

(ArtificiallyScarceGoods)Excludablebutnon-rivalinconsumptionItisnotreallyscarce:usebyonepersondoesnotreduceitsavailabilitytoothersButitcanbeexcludable:peoplewhodonotpaycanbepreventedfromusingitArtificiallyScarceGoodsAnartificiallyscarcegoodisexcludableandnon-rivalinconsumption.Itismadeartificiallyscarcebecauseproducerschargeapositivepricebutthemarginalcostofallowingonemorepersontoconsumethegoodiszero.CommonGoods:

(CommonResources)Non-excludableandrivalinconsumptionNon-payerscannotbeeasilyexcludedEachunitconsumedbyonepersonmeansonelessunitavailableforothersTheproblemofoveruse-auserdepletestheamountofthecommonresourceavailabletoothersbutdoesnottakethiscostintoaccountwhendecidinghowmuchtousethecommonresourceACommonResourceFishinginapublicriver:Eachfisherman’sindividualmarginalcostdoesnotincludethecostthathisorheractionsimposeonothers:thedepletionofthecommonresourcethemarginalsocialcostcurve,MSC,liesabovethesupplycurve;inanunregulatedmarket,thequantityofthecommonresourceused,QMKT,exceedstheefficientquantityofuse,QOPT.TheEfficientUseandMaintenanceofaCommonResourceUsetaxesMakeitexcludableandassignpropertyrightsCreateofasystemoftradablelicensesfortherighttousethecommonresourcePublicGood:Agoodorservicethat,atleasttosomedegree,isbothnon-rivalandnon-excludableNon-rivalGoodAgoodwhoseconsumptionbyonepersondoesnotdiminishitsavailabilitytoothersNon-excludableGoodAgoodthatisdifficult,orcostly,toexcludenon-payersfromconsumingIfnon-excludable:Rationalconsumerswon’tbewillingtopayforthegoodPeoplewhodonotpaycannotbepreventedfromconsumingFree-riderproblem:individualshavenoincentivetopayfortheirownconsumptionInefficientlylowproductionIfnon-rivalinconsumptionMarginalcost=0Priceshouldbe0InefficientlylowconsumptionWhatgoodsandservicesshouldgovernmentprovide?PurePublicGoodAgoodorservicethat,toahighdegree,isbothnon-rivalandnon-excludablePurepublicgoodsshouldbeprovidedbygovernmentbecause:For-profitprivatefirmswouldfinditdifficulttorecovertheircostsofproduction.SincetheMCofservingadditionalusersiszerooncethegoodhasbeenproduced,thenchargingforthegoodwouldbeinefficient.Cost-BenefitAnalysisSocialcostsandsocialbenefitsPeoplehavenoincentivetopayforefficientquantityofpublicgoodsPeopletendtooverstatethevalueofpublicgoods(peopletendtoprefertoomuchofthegoodswhentheydon’thavetopayforit:marginalcostis0)AdvantagesofUsingGovernmenttoProvidePublicGoodsCostofaddingataxisrelativelylowMinimizesthedifficultyindeterminingwhowillbearwhatshareofthetaxburdenMaybetheonlyfeasibleproviderGovernmentProvisionApurepublicgoodshouldbeprovidedbythegovernmentonlywhenthebenefitexceedsthecost.Thecostofthepublicgoodisthesumoftheexplicitandimplicitcostsincurredtoproduceit.Thebenefitofthepublicgoodisthesumofthereservationpricesofallpeoplewhowantthegood.Governmenttaxes:

thewaytofinancepublicgoodsPayingforPublicGoodsNoteveryonebenefitsequallyfromapublicgoodorservice.Therefore,themostequitablewaytopayforthepublicgoodorserviceistotaxpeopleinproportiontotheirwillingnesstopay.TaxSystemHeadTaxAtaxthatcollectsthesameamountfromeverytaxpayerAheadtaxrulewillruleouttheprovisionofmanyworthwhilepublicgoods.ProportionalIncomeTaxAtaxunderwhichalltaxpayerspaythesameproportionoftheirincomesintaxesTaxSystemRegressiveTaxAtaxunderwhichtheproportionofincomepaidintaxesdeclinesasincomerisesProgressiveTaxOneinwhichtheproportionofincomepaidintaxesrisesasincomerises.Alternativestousingtaxestofundpublicgoods:FundingbydonationDevelopmentofnewmeanstoexcludenon-payersPrivatecontractingSaleofby-productsTaxSystemTrade-offbetweenequalityandefficiencyEquity:fairness,the“right”peopleactuallybearsthetaxburdenEfficiency:minimizesthedirectandindirecttaxcollectioncoststotheeconomyTaxEfficiencyMinimizingadministrationcosts(directcosts)Reducingdeadweightloss(indirectcosts)Recall:excisetaxToReduceDeadweightLossTaxesdecreasesthepricetheproducersreceiveandincreasesthepricetheconsumerspayTheincidenceoftaxisdeterminedbytheelasticitiesofdemandandsupplyToreducethedeadweightlosscausedbytax,imposetaxesontheoneswhohavethemostinelasticresponsesToLowerAdministrationCostsAdministrationcosts:theresourcesactuallyspentoncollectingandpayingthetaxesThedifficultiesofcalculating,collectingandpayingthetaxesTaxFairnessThebenefitsprincipleTheoneswhobenefitfromthespendingshouldpayforitTheabilitytopayprincipleTheoneswhoaremoreabletopayshouldpayforitTheTaxSystemTaxbases:theincomeorpropertyvaluethatdetermineshowmuchtaxanindividualpaysTaxStructure:howthetaxdependsonthetaxbaseProportionalProgressiveRegressiveTaxBases

（表一）勞動(dòng)所得1．

工資、薪金所得；2．

個(gè)體工商戶的生產(chǎn)、經(jīng)營(yíng)所得3．

對(duì)企事業(yè)單位的承包經(jīng)營(yíng)、承租經(jīng)營(yíng)所得4．

勞務(wù)報(bào)酬所得5．

稿酬所得自有資產(chǎn)所得6.特許權(quán)使用費(fèi)所得；

7.利息、股息、紅利所得；

8.財(cái)產(chǎn)租賃所得；

9.財(cái)產(chǎn)轉(zhuǎn)讓所得；偶然所得10.一些偶然性所得其他所得11.經(jīng)國(guó)務(wù)院財(cái)政部門(mén)確定征稅的其他所得IncomeRedistributionthroughTaxesandGovernmentSpendingProgressivetaxes:takingmoremoneyawayfromtherichtoprovidesupportsforthepoorGovernmentSpending:transferpaymentsWelfareIn-kindtransfersNegativeincometaxIncomeRedistribution:

SocialSecurityProgressivity(verticalequity)IndividualequityHorizontalequityEconomicefficiencyProgressivity:Redistributionfromthebetter-offtothelesswell-offRedistributeresourcestotheelderlyfromtherestofthepopulation(intergenerationalredistributionHig