MEC 106

DECEMBER 2023

1. Explain how ‘direct democracy’ does not

guarantee welfare maximisation.
2. Discuss how ‘knowledge’ is regarded as a ‘global
public good.’
3. Derive the Ramsey’s optional taxation rule.
4. Discuss how ‘marginal cost pricing’ results in an economic loss to a private producer.
5. Differentiate between ‘local public goods’ and
‘global public goods’.
6. Distinguish between the concepts of profit-
seeking and rent-seeking.
7. Explain the concept of tax-efforts. Why is it
important ?
8. Distinguish between the following :
(i) Revenue expenditure and Capital
expenditure
(ii) Plan expenditure and Non-plan
expenditure
9. State the ‘decentralisation theorem’ with its
rationale.
10. What are the principles of ‘tax assignment’ ?
What is the criteria for effecting
intergovernment fiscal transfers ?
11. Write a note on ‘Summary assessment of
macroeconomic policies’ on the economic growth
of an economy in general.
12. What is meant by ‘deadweight loss of a tax’ ?
What are its implications ?

JUNE 2023

1. State the three compensation principles.

Explain how by considering the utility
possibility frontier, a socially more desired
welfare level can be attained.
2. Describe the major policy instruments available
as ‘solutions’ to the issue of externalities.
3. Discuss the evolution of indirect taxes
towards the Goods and Services Tax (GST) in
India.
4. Explain the condition for ‘debt sustainability’.
5. Explain the concept of ‘equity’ in the context of
taxation.
6. State Arrow’s Impossibility Theorem with its
conditions.
7. Explain how the method of ‘auction design’
works.
8. Explain the reasons behind the Wagner’s law of
increasing public expenditure.
9. Discuss the concept of ‘Rate of Return
Regulation’.
10. Describe how ‘Federation in India’ is different
from those in other countries.
11. State the goals of monetary and fiscal policies
of a country.
12. Write short notes on the following :
(a) Anti-trust laws
(b) Climate change

DECEMBER 2022

1. ‘‘Public Choice Theory is an application of

economics to the study of politics.’’ Discuss.
2. State the Inverse Elasticity Rule of optimal
commodity taxation proposed by Ramsey.
Discuss its implications in terms of efficiency and
equity.
3. Discuss the devolution of functions across
different levels of Government in a federal
set-up.
4. Why should deficit in the budget be financed by
borrowing rather than by monetization ? Explain.
5. What is meant by Social Cost ? In what ways can
they be internalized ?
6. Explain the term ‘Tax Evasion’.
7. What are the basic characteristics of pure public
goods ? Explain.
8. How does ‘Public Economics’ differ from ‘Public
Finance’ ?
9. Distinguish between the theories of ‘first best’
and ‘second best’ in the designing of public policy.
10. How is internal public debt different from
internal public liabilities ? What is the
composition of public deposits in India ?
11. Explain the optimal size of community for a
given level of public goods.
12. Write short notes on any two of the following :
(a) Voting by Show of Hands vs. Voting by
Walking with Feet
(b) Marginal Cost Pricing in a Natural
Monopoly
(c) Social Choice
(d) Benefit Received vs. Ability to Pay Approaches
to Tax Equity
(e) Strategic Voting

JUNE 2022

1. ‘‘While formulating and evaluating public policies,

the notions of efficiency, equity and trade-off are
to be considered.’’ Discuss.
2. Differentiate between the following with
examples : (i) public goods and merit goods; and
(ii) public bads and demerit goods.
3. What is the objective function in the Ramsey
Theory of Optimal Taxation of goods ? State and
interpret the Ramsey rule of inverse elasticity.
4. How is fiscal federalism different from political
federalism ? Explain the concept of vertical fiscal
imbalance and horizontal imbalance in this
context.
5. Define externalities. Explain with examples.
6. State the marginal rule of optimum provision of
public goods. Explain how it is different from
that in the case of private goods.
7. What is meant by ‘median voter wins’ ? Under
what conditions does he win ?
8. What are the sources of Internal and External
Public Debt in India ? How do treasury bills differ
from government bonds ?
9. What are the benefits of privatisation of a
nationalized enterprise which is making profit ?
Discuss.
10. Compare the different types of grants in terms of
outcomes.
11. Explain the concepts of competitive federalism
and cooperative federalism.
12. Write short notes on any two of the following :
(a) Crowding out phenomenon
(b) Rawls’ idea of primary goods
(c) Agenda setting in public policy
(d) Local public goods
(e) Natural monopoly

DECEMBER 2021

1. Distinguish between negative and positive

externalities. To what extent, externalities are
responsible for market failure ?
2. Define public debt management and state its
objectives. Elaborate the important principles
of debt management.
3. What is Privatisation ? What are its objectives ?
Give Ree’s arguments in its favour and against.
4. Examine the principle of ‘Ability to Pay’ from
the point of view of justice in taxation. Is it a
satisfactory measurement of taxable capacity ?
Justify.
5. Define ‘incidence of taxation’. Account for
various factors which determine the incidence
of taxation.
6. State and prove Arrow’s impossibility theorem.
7. “Many factors is addition to government
policies influence a person’s choice of location.” Comment.
8. What do you understand by ‘public
intervention’ ? Why does it differ from economy
to economy ?
9. Distinguish between ‘Tax Avoidance’ and ‘Tax
Evasion’ ? Give the views of Alingham Sandom
on tax evasion.
10. What is the concept of market failure ? Discuss
the factors responsible for it.
[ 4 ] MEC-006
11. Discuss briefly the various methods of ‘Public
debt repayment’.
12. Write short notes on any two of the following :
(a) Merit good
(b) Log rolling
(c) Regressive taxation
(d) Strategic voting

JUNE 2021

1. Define Public Economics and delineate its

scope. Why is it often called Applied Welfare
Economics ?
2. “The state must not bite more than it can
chew properly.” In the light of this
statement, state the role of government
intervention and its forms in development of
societal resources.
3. Distinguish between internal and external
public debt. What are the various methods of
securing public debt ?
4. Explain the requirement of inter-governmental
transfer of grants. How does transfer of
grants correct vertical and horizontal
imbalances in a federal country and achieve
fiscal equalisation ?
5. What are the guiding principles which should
be considered while evaluating a current tax
policy ?
6. Distinguish between public choice and social
choice.
7. Discuss prisoners’ dilemma. Explain its
applicability in real world.
8. What are the major weaknesses of public sector
undertakings in India ?
9. Explain the economic advantages and
disadvantages of decentralization.
10. Discuss the various stages in policy process.
11. Write short notes on any two of the following :
(a) Average cost pricing
(b) Joint ventures
(c) Canons of Taxation
(d) Merit goods
12. Differentiate between fiscal federalism and
political federalism.

DECEMBER 2020

1. Define Internalities. Discuss the consequences and

some solutions thereof.
2. Explain the objectives of Public Debt
Management. Give the principles of Debt
Management as stated of Philip E. Taylor.
3. Define Privatisation. Give Rees’ arguments in
favour of privatisation. Do you agree that
privatisation decreases the extent of political
intervention ?
4. ‘Equity or fairness should be the essential
feature of any tax system.’ Which of the two
approaches – ‘Benefit Received Approach’ and
‘Ability to Pay Approach’ would you consider
better for designing an equitable tax structure ?
Support your answer with suitable examples.
5. State the guiding principles for evaluating a
current tax system and the tax reforms.
6. Compare and contrast Rawl’s and Bentham’s
social welfare functions.
7. How do transfers of grants correct horizontal and
vertical imbalances in a federal country ?
8. Write a note on Arrow’s Impossibility Theorem.
9. Explain the various stages involved in framing of
public expenditure policy.
10. Write short notes on any two of the following :
(a) Burden of Public Debt
(b) Plurality Voting
(c) Tax Incidence
(d) Public Goods
11. Bring out the role of media in an advisory
coalition in success or failure of a policy
programme.
12. (a) Why are bureaucrats interested in projects
that have large expenditure in the
present ?
(b) Why can stabilisation functions not be
entrusted to local and regional
governments ?

JUNE 2020

1. Define Public Economics and outline its scope. Why Public Economics is often called
Applied Welfare Economics ?
2. What is the rationale of inter-governmental
transfers in a federal system ? Explain in this
context the role of giving grants to local
governments.
3. What are the causes of Market Failure ? State a
few instruments of public intervention to arrest
market failure.
4. Distinguish between 'Tax Avoidance' and 'Tax
Evasion'. Discuss Alingham Sando's model of
tax evasion.
5. Explain 'horizontal equity' and 'vertical equity'.
Give the significance of these two concepts in
taxation.
6. Write about the view of Tiebout on welfare
gains of decentralisation.
7. Explain Lindahl pricing as applied to public
goods.
8. Write about `crowding effect' and its types.
9. Write short notes on any two of the following :
(a) Concept of Log Rolling
(b) Voting by feet
(c) Public utilities
(d) Progressive taxation
10. Explain Rawls' theory of justice. Compare it
with Nozick's theory.
11. What is the idea behing pure theory of public
expenditure ?
12. Explain the methods of debt repayment.