Question1. Evaluate the following statement:
“The First Theorem of Welfare Economics describes that as long as producers and consumers act as perfect competitors and there are no other market failures, a Pareto efficient allocation of the resources emerges.
Question2. Explain the conditions essential to accomplish Pareto Efficiency.
Question3. What is public good? Explain how the free rider problem might be a problem in provision of a public good.
Question4. What do you mean by ‘‘market failure’’? Describe the various kinds of market failures that might take place in an economy.
Question5. How will you determine a good tax system?
Question6. Describe the different components in budgetary process of Mauritian Government. How will you justify present budget deficit?