Question 1:

(i) How do economists go about studying the economics of the public sector? Describe the four stages of analysis

(ii) The level of government intervention differs from country to country. In some countries, the level of intervention is kept very low. According to you, what are the main reasons for limited roles of government?

Question 2:

(i) Mauritius has embarked upon on a tax reform programme. According to you, how can the tax system become more efficient.

(ii) What are the principal reasons why markets fail to produce efficient outcomes?

Question 3:

(i) Reducing budget deficit is one of the main objectives of the Mauritian Government. According to you, what is a budget deficit?

(ii) The budget deficit can have adverse effects. What are the consequences of a budget deficit?

(iii) What is the Mauritian Government doing to cure the budget deficit?

Question 4:

(i) What do economists mean when they say the economy is Pareto efficient?

(ii) What basic conditions have to be satisfied if markets are to be efficient?