23022 Public Economics
Warning: The information on this page is indicative. The subject outline for a
particular session, location and mode of offering is the authoritative source
of all information about the subject for that offering. Required texts, recommended texts and references in particular are likely to change. Students will be provided with a subject outline once they enrol in the subject.
Subject handbook information prior to 2024 is available in the Archives.
Credit points: 6 cp
Subject level:
Undergraduate
Result type: Grade and marksRequisite(s): 23567 Intermediate Microeconomics OR 25567 Intermediate Microeconomics
These requisites may not apply to students in certain courses.
There are course requisites for this subject. See access conditions.
Anti-requisite(s): 25022 Public Economics
Description
This subject applies and extends the knowledge and skills students have developed in Intermediate Microeconomics to an analysis of the economic rationale for collective choice and government intervention in the economy. It explores and evaluates the government's ability to identify and achieve more efficient and equitable outcomes. Students extend their knowledge of welfare economics and examine the motivation behind government intervention in the economy. They see why a market economy fails to achieve efficient solutions in the presence of public goods, externalities, natural monopoly and asymmetric information. The subject explains the mechanisms of collective choice, cost–benefit analysis and income redistribution and explores the theory of taxation. Students enhance their ability to distinguish between progressive and regressive taxes, between formal and effective incidence, and between efficient and equal taxes. They also examine how individuals react to income taxes and benefits by modifying their labour supply and consumption behaviour. Finally, the subject presents specific sectors where government intervention is traditionally active, such as health care and education, with emphasis on the Australian economy.
Subject learning objectives (SLOs)
| 1. | explain the scope for Government intervention in a market economy |
|---|---|
| 2. | critically evaluate Governmental taxation and benefits policies including trade-offs between equity and efficiency |
| 3. | apply the principles of public finance and public economics to issues in the Australian economy. |
Contribution to the development of graduate attributes
This subject applies and extends the knowledge and skills students have developed in Intermediate Microeconomics to an analysis of the economic rationale for collective choice and government intervention in the economy. It is designed to equip students with the knowledge and ability to explain and evaluate various forms of government intervention which is aligned with the following graduate attributes:
- Communication and Collaboration
- Social responsibility and cultural awareness
Teaching and learning strategies
The subject will employ a traditional lecture/tutorial-based teaching strategy. Lecturer-student interaction during lecturers and tutorials will be strongly encouraged.
Content (topics)
- Welfare Economics: Efficient allocation of resources; the first theorem of welfare economics; and social welfare functions;
- Market Failures: public goods; externalities; natural monopoly; asymmetric information;
- Social Policy: health care, education; with reference to the Australian economy
- Political Economy: voting theory and cost-benefit analysis;
- Inequality: inequality in income and opportunities;
- Taxation: income and goods tax; tax incidence; efficient taxation
Assessment
Assessment task 1: Online Problem Sets (Individual)*
| Objective(s): | This addresses subject learning objective(s): 1, 2 and 3 |
|---|---|
| Weight: | 15% |
| Length: | 60 minutes |
| Criteria: | *Note: Late submission of the assessment task will not be marked and awarded a mark of zero. |
Assessment task 2: Public Policy Debate (Group)*
| Objective(s): | This addresses subject learning objective(s): 1, 2 and 3 |
|---|---|
| Weight: | 25% |
| Length: | 20 slide powerpoint presentation |
| Criteria: | *Note: Late submission of the assessment task will not be marked and awarded a mark of zero. |
Assessment task 3: Final Exam (Individual)
| Objective(s): | This addresses subject learning objective(s): 1, 2 and 3 |
|---|---|
| Weight: | 60% |
| Length: | 2 hours |
Minimum requirements
Students must achieve at least 50% of the subject’s total marks.
Required texts
There is no required text for this subject. Students are provided with a set of lecture notes/material free of charge, which is available in the subject Canvas page under Course Resources.
Recommended texts
- Public Economics: principles and practice by Peter Abelson [This is an Australian book. It is free.]
- Economics of the Public Sector (4th Edition) by Joseph E. Stigliz and Jay Rosengard.
- Public Finance and Public policy (5th edition) by Jonathan Gruber [good book but very US focussed]
- Microeconomics: An Intuitive Approach with Calculus (2nd Edition) by Thomas Nechyba [if you need to revise Microeconomics]