Chapter 65438 +0 Government and Market
Case:
On the last Sunday of 2002, China ended the monopoly of power industry. The former State Power Company, which owns 46% of the country's power generation assets and 90% of its transmission assets, was split and reorganized into 1 1 independent company, which was formally established on February 29th, 65438.
China's civil aviation reform, which lasted from 65438 to 0987, also made a breakthrough in 2002. With the establishment of six major civil aviation groups (5438+ 1010) in June, CAAC has completely decoupled from its subordinate civil aviation enterprises. The three major air transport groups based on China International Airlines, China Eastern Airlines and China Southern Airlines will account for 80% of the total assets of China civil aviation.
Problem: the government's correction of market failure.
Analysis: The main manifestations of market failure:
(1) Competition failed.
(2) Externality
(3) The market is incomplete
(4) Public goods
(5) Information asymmetry
In order to make up for the market failure, government intervention is needed. The means and fields of government intervention are:
(1) Intervention efficiency
① Financial expenditure ② Financial subsidy ③ Government procurement ④ Restricting monopoly.
(2) Intervention in income redistribution
① Taxes and transfer payments
② Investment in public utilities
③ Special tax
(3) Intervention in economic stability
(1) Automatic stabilizer inherent in the financial system.
② discretionary fiscal policy
③ Financial policy
④ Emergency administrative measures
⑤ Moral suggestions
In this case, the government realizes operable competition by limiting monopoly and restoring the role of market mechanism.
Chapter II Promoting Competition
Case 1:
1998 may 18, the us department of justice and 20 States filed a complaint with the supreme court, accusing Microsoft of using its Windows operating system to force consumers to use its other software products-the most important of which is Internet Explorer. 1999, the first-instance judgment was made in this case. In the 270-page judgment, Judge Jackson listed a series of anti-competitive and monopolistic behaviors of Microsoft. Microsoft has been trying to expand its sphere of influence beyond the software industry and enter the increasingly lucrative e-commerce and network connection industries. They have invested tens of billions of dollars in communication and technology companies (such as AT & amp； T) Because Microsoft's Windows operating system is monopolized, bundling Internet browsing software "Internet Explorer" with "Windows" is equivalent to monopolizing the transportation channels related to e-commerce for consumers and manufacturers.
Question:
1. Combined with this case, what impact does monopoly and anti-monopoly have on society?
2. What is the reference significance of American anti-monopoly law to China's market economy construction?
Analysis: Monopoly market will bring efficiency loss and affect the normal function of the market, which is mainly reflected in: monopoly will reduce output and increase prices; Monopoly causes unnecessary social losses; Monopoly leads to the failure of enterprises to make progress.
Anti-monopoly measures are needed to correct this market failure, reduce prices and improve the welfare level of consumers and society.
1890, the United States passed the first American antitrust law-Sherman Act. 19 14 years, the United States promulgated the Clayton Act and the Federal Trade Commission Act. These three bills have basically formed the anti-monopoly legal system of the United States.
Anti-competitive behaviors regulated by American anti-monopoly law include: joint restriction of competition, abuse of economic advantage, price discrimination, monopoly and enterprise merger, other anti-competitive behaviors (holding shares, concurrently holding directors, bottleneck monopoly, commercial bribery), and behaviors that harm consumers (deceptive pricing, deceptive advertising, false labels).
The characteristic of American anti-monopoly law is to limit unfair competition that leads to monopoly, rather than to oppose existing monopoly enterprises. Therefore, the existence of monopoly enterprises in an industry is not illegal in itself, and it is illegal only if monopoly enterprises use their monopoly power to conduct unfair competition. This makes the anti-monopoly law of the United States have a strong "behavior law" feature, that is, everything is judged by whether the behavior of enterprises violates fair competition.
Case 2:
The history of China Telecom's restructuring can be traced back to the establishment of China Unicom Company in 1994. At that time, the total assets of China Unicom were only 1/260 of China Telecom. However, this move changed the situation that the Ministry of Posts and Telecommunications monopolized the domestic telecommunications market. 1February 1999, the Ministry of Information Industry decided to spin off the paging, satellite and mobile services of China Telecom. The original China Telecom was split into three companies: China Telecom, China Mobile and China Satellite Communication, and the paging service was merged into China Unicom. 200 1 12 the State Council approved the new telecom system reform plan and reorganized the existing telecom enterprises. The existing assets of China Telecom are divided into two parts: North and South. Telecom companies in North China, Northeast China, Henan, Shandong 10 provinces (autonomous regions and municipalities directly under the Central Government) belong to the northern part of China Telecom; The rest belong to the southern part of China Telecom.
Question: 1. Monopoly and market failure. 2. Government's attitude and measures towards monopoly.
Analysis:
1. Efficiency loss of monopoly market.
(1) Monopoly reduces output and increases prices;
(2) Monopoly causes unnecessary social losses;
(3) Monopoly leads to the failure of enterprises to make progress.
The inefficiency of monopoly market leads to the failure of market mechanism, which is one of the situations that lead to market failure.
2. At present, the policies and measures of the developed countries in the world to limit monopoly and promote competition are basically based on the above standards, with the policy goal of promoting "operable competition".
Major developed countries have basically enacted laws prohibiting monopoly and maintaining fair trade. The specific measures are mainly to restrict monopoly through legislation, which is supervised by administrative organs and implemented by judicial organs. The government's anti-monopoly policy is based on these laws.
China's anti-monopoly and anti-unfair competition should be based on foreign experience and combined with its own national conditions.
Chapter IV Suppression of Externality
Case 1:
In a small town, one of the most important economic activities that people in the town engage in is raising sheep. Many families in the town have their own flocks, and the wool produced can be used to make clothes to support their families. Most of the time, sheep graze on the grass of the land around the town, which is called "the town has land" No family owns land. On the contrary, urban residents collectively own land, and all residents are allowed to herd sheep on the grassland of this land. Collective ownership works well because the land is large. As long as everyone can get the land they want with good grass, the land in the town is not a competitive item, and there is no problem for residents to graze sheep on the grass for free. With the passage of time, the population of the town is increasing, and there are more and more sheep on the grassland with land in the town. Due to the increasing number of sheep and the fixed land, the land began to lose its self-sustaining ability. Finally, the land became barren. Because there is no grass on the ground and it is impossible to raise sheep, the once prosperous wool industry in this town has disappeared. Many families have lost their sources of livelihood.
Q: What caused this tragedy?
Analysis: In fact, the tragedy of * * * is caused by externalities. When a family's sheep graze on * * * land, it will reduce the quality of land available to other families. Because people don't consider this negative externality when deciding how many hours they have, the number of sheep is too large.
If this tragedy is foreseen, the town can solve this problem in various ways. It can control the number of sheep in each family, internalize externalities by taxing sheep, or auction a limited number of shepherd licenses. In other words, medieval towns can solve the problem of overgrazing by solving the pollution problem in modern society.
However, there is a simpler solution to this land example. This town can divide the land among families. Every family can enclose their own land to prevent overgrazing. In this way, land becomes a private property, not a resource. This result actually appeared during the enclosure movement in Britain in the17th century.
The Tragedy of * * * is a story with a universal conclusion: when one person uses resources, he reduces the enjoyment of others. Because of this negative externality, * * * resources are often overused. The government can solve this problem by adjusting taxes or reducing the use of resources. In addition, the government can sometimes turn resources into private goods. People have known this conclusion for thousands of years. Aristotle, an ancient Greek philosopher, pointed out that * * * has resources: "Many people always pay the least attention to what they have, because everyone cares more about their own things than what they have with others."
Case 2:
A beekeeper lives next to an orchard, and the owner of the orchard benefits from bees, because each box of bees can pollinate about an acre of fruit trees. However, the owner of the orchard does not pay any fees for this service, because bees can come to the orchard without doing anything, and bees are not enough to pollinate the orchard. Therefore, orchard owners must complete pollination manually at the cost of per mu of fruit trees 10 yuan. The marginal cost of beekeepers MC = 10+2q, where q is the number of beehives, starting from 20 yuan.
Question: (1) How many boxes of bees will beekeepers pack? (2) The number of economic and effective hives. (3) What changes can lead to more efficient operation?
Answer: (1) MC = Mr, which is 10+2q = 20 and q = 5 for beekeepers. (2) MC = Mr, that is, 10+2q = 10+20, and q = 10. (3) Method 1: The orchard owner pays a certain fee to the beekeeper and asks the beekeeper to raise more bees; Method 2: Orchard owners merge with beekeepers to raise bees themselves.
Case 3:
China is a big coal-burning country, and coal accounts for nearly 70% of the total primary energy consumption. The sulfur dioxide produced by coal combustion has serious pollution to the atmosphere. Acid rain caused by sulfur dioxide emission has a great impact on residents' health and ecosystem. According to estimates, the annual economic loss caused by acid rain in China is as high as 1 1000 billion yuan. Therefore, the government of China has been seeking effective preventive measures, and has tried out emission trading in some provinces and cities. On September 30th, 2002, Jiangsu Provincial Environmental Protection Department and Provincial Economic and Trade Commission officially announced the first domestic emission trading method. In June 2003, 5438+1mid-October, Jiangsu completed the first emission trading of a drop of sulfur dioxide. Taicang Port Environmental Protection Generator Company, located in Taicang City, Jiangsu Province, purchased sulfur dioxide emission rights from Nanjing Xiaguan Power Plant for two years at a price of 3.4 million yuan.
Question: 1. What is externality? 2. What are the corrective measures for externalities?
Analysis: the definition of externality: the phenomenon that some economic entities' behaviors have influenced other economic entities, but they have not borne the due costs or received due compensation. Defining externalities in the simplest terms refers to the influence of one person's behavior on the welfare of others.
Measures to correct externalities can be divided into:
(1) The government exercises administrative control.
(1) Prohibit certain behaviors to solve external problems. For example, it is forbidden to pour toxic chemicals into water supply areas.
(2) stipulate the adoption of new technologies.
(3) the prescribed emission standards
(2) Economic control
① Pigovian taxes and subsidies.
Definition of Pigou tax: a tax used to correct negative externalities. It was first proposed by Pigou, mainly to levy taxes on polluters, also known as "sewage charges".
The basic idea of this method is to levy taxes on enterprises or individuals with negative externalities equivalent to the external costs caused by them, so that the external costs become the internal costs of the enterprises or individuals concerned, that is, to realize the internalization of negative externalities and force them to consider the costs when making decisions.
② Emission trading
Emission trading means that the control authorities set a ceiling on the total amount of pollutants discharged, and issue pollutant discharge permits according to this ceiling, which can be bought and sold in the market.
Case 4:
On March 22, 2002, the People's Court of Changxing County, Zhejiang Province tried a special lawsuit. Fish farmers in Si 'an Reservoir in Changxing County sued the organic synthetic chemical plant in Guangde County, Anhui Province, demanding compensation for the loss of aquatic products caused by reservoir pollution.
On April 30th, 200 1 year, about 2,000 mu of water in Si 'an Reservoir in Changxing County suffered from chemical pollution, and fish, shrimp and blue crabs died in a large area. Previously, in July 1999 and 19, 3,000 mu of water in Si 'an Reservoir was polluted by the same type. According to the investigation of Changxing fishery department, the direct economic loss caused by two pollutions to Changxing farmers reached 870,000 yuan.
Question: 1. The meaning of externality. Government's correction of externalities. 3. Definition of property rights and pollution control.
Analysis:
1. Definition of externality: the phenomenon that the behavior of some economic entities affects other economic entities, but fails to bear due costs or get due compensation for it. Defining externalities in the simplest terms refers to the influence of one person's behavior on the welfare of others. The production discharge of chemical plants has negative externalities of production.
2. The government's amendments to externalities:
(1) The government exercises administrative control.
(1) Prohibit certain behaviors to solve external problems. For example, it is forbidden to pour toxic chemicals into water supply areas.
(2) the provisions of new technology.
(3) the prescribed emission standards.
1) emission standard is the highest limit of specific pollutants discharged by various pollution sources, which is formulated by the control department and implemented according to law.
2) Problems existing in the specified sewage discharge standard.
First, how to determine the emission standards.
B, how to determine the fine.
(2) Economic control.
(1) Pigou taxes and subsidies.
Definition of Pigou tax: a tax used to correct negative externalities. It was first proposed by Pigou, mainly to levy taxes on polluters, also known as "sewage charges".
The basic idea of this method is to levy taxes on enterprises or individuals with negative externalities equivalent to the external costs caused by them, so that the external costs become the internal costs of the enterprises or individuals concerned, that is, to realize the internalization of negative externalities and force them to consider the costs when making decisions.
(2) Emission trading.
Emission trading means that the control authorities set a ceiling on the total amount of pollutants discharged, and issue pollutant discharge permits according to this ceiling, which can be bought and sold in the market.
3. If the property right can be clearly defined, the pollution problem can be solved by Coase theorem. When the transaction cost is zero, no matter how the initial rights are defined, an agreement can be reached through negotiation between all parties, which can solve the externality problem well and allocate resources effectively.
Chapter V Provision of Public Goods
Case 1:
China's compulsory education law stipulates: "citizens, regardless of nationality, race, sex, occupation, property status, religious beliefs, etc." , enjoy equal opportunities for education according to law "and" the state exempts those who receive compulsory education from tuition fees ". Although through long-term efforts, most local compulsory education in China has been exempted from tuition fees, but other expenses such as books, miscellaneous fees, accommodation fees, tuition fees, school uniforms, newspapers and periodicals, school building maintenance funds and so on are numerous.
To this end, some places in China have begun to implement some targeted measures one after another:
Since 200 1, Guangdong Province has allocated 300 million yuan of special funds every year to exempt poor rural families from books and miscellaneous fees in compulsory education. From September 2002 1, about 600,000 primary and secondary school students in compulsory education in Beijing were exempted from paying miscellaneous fees. It means that more than half of the 6.5438+0.09 million primary and secondary school students in Beijing will enjoy free compulsory education.
Question: 1. Effective supply of public goods. 2. Externality of compulsory education.
Analysis:
1. Due to the indivisibility of utility, the non-exclusiveness of benefits and the non-competitiveness of consumption, public products will lead to hitchhiking. If provided by the market, public goods will be in short supply or in short supply. The necessity for the government to supply public goods: the full supply of public goods is not only an important condition for the government to perform its economic functions, but also an important means for the government to perform its economic functions. Therefore, the government should provide public goods to fulfill its economic functions and become an effective government. The government is more capable of providing public goods. First, the government, as a public authority, has legal coercive power that market forces do not have; Second, the government is a long-standing public authority, which can continuously provide public products to the society; Third, the government can give the government the responsibility of supplying public goods through legislation, and give it the power to raise funds and allocate resources, so as to stabilize the supply of public goods; Fourth, the government is a public authority representing the public interest, and a democratic government is supervised by voters, so it can safeguard justice and is suitable for providing public goods.
2. Definition of externalities: The phenomenon that some economic entities' behaviors have influenced other economic entities, but they have not borne their due costs or received due compensation. Defining externalities in the simplest terms refers to the influence of one person's behavior on the welfare of others. Compulsory education has positive externalities, and it is difficult for market forces to provide the quantity of social demand.
Case 2:
Yiwu and Dongyang are located in Jinhua Valley. Dongyang city is in the upper reaches, and it is rich in water resources. There is only one Hengjinshui Reservoir, which not only meets the needs of agricultural irrigation and urban water supply in irrigation areas, but also has 65.438+0.65 billion cubic meters of available water. But Yiwu is seriously short of water, especially to develop a modern trade city, and Shuicheng is the first constraint.
In February of 200 1 year, Yiwu signed an agreement with Dongyang to transfer part of the water rights of Hengjin Reservoir for compensation. According to the agreement, Yiwu invested 200 million yuan to purchase the right to use 49.999 million cubic meters of water per year in Dongyang Hengjin Reservoir. After the transfer of water rights, the original ownership of the reservoir remains unchanged, and Dongyang is still responsible for the operation and engineering maintenance of the reservoir. In addition to one-time investment, Yiwu pays the total management fee (water resource fee) at the price of 0. 1 yuan per cubic meter every year according to the actual water supply. This agreement broke the situation that the right to use water resources was completely monopolized by the state, and initiated the reform of water rights system in China.
Question: 1. Public goods and public resources. 2. The government manages public resources. 3. How does Coase Theorem work?
Analysis:
1. A product or service has both inseparability of utility and non-competitiveness of consumption, but it can be technically exclusive, and the cost of exclusivity is high, so the product or service should be a pure public product; If the product or service is related to
When the utility is inseparable and the benefits are non-exclusive, but the consumption is competitive, then this product or service belongs to public resources.
2. The government can make rational use of public resources by defining property rights, allocating them to the state, collecting fees and taxes, making reasonable plans, and limiting the amount of use.
3. Coase Theorem: When the transaction cost is zero, no matter how the initial rights are defined, the parties can reach an agreement through negotiation, which can solve the externality problem well and realize the effective allocation of resources. Dangjiao
Easy cost is very small, and the number of parties is small, so this method can effectively solve the problem.
Case 3:
Imagine that there is a community with only two families in the countryside. It is difficult to communicate with the outside world because of the bad road conditions. If a road is built, all these inconveniences can be solved. Suppose the cost of road construction is 4, and the income of each family is 3. If two companies jointly build roads, each company will share the cost of 2, each company will benefit 3, and the pure "profit" of the two companies will be1; If one party builds a road and the other party enjoys success, the party that builds the road will pay the full cost 4, get the income 3, and the net "profit" is-1; If both companies don't repair it, their profits will be zero.
Q: Make a game analysis of it.
Analysis: Road construction introduction: Li Si
Repair or not?
1, 1
- 1,3
3,- 1
0,0
Zhang Xiu
Three don't repair.
In this abandonment, road construction is Zhang San's strict inferior strategy, so we eliminated it, and road construction is also Li Si's strict inferior strategy, so we also eliminated it. In this way, by using the elimination method of strict inferior strategy, we get the strictly dominant strategy equilibrium shown in bold in this game: neither of us will start work, and everyone will get zero.
Chapter VI Macro-control
Case:
On April 16, 2002, Xiang Huaicheng, Minister of Finance, stressed at the press conference held by the State Council Information Office that the proactive fiscal policy was adopted in a specific domestic environment and achieved remarkable results in the past four years. In the future, the proactive fiscal policy will continue to be implemented, but with the passage of time and changes in the situation, the proactive fiscal policy will gradually fade out.
Question: 1. The meaning and mechanism of fiscal policy. 2. The main means and functions of expansionary fiscal policy.
Analysis:
1. The so-called fiscal policy is an intervention measure that uses changes in government expenditures and taxes to influence aggregate demand and total supply to stabilize economic fluctuations. Fiscal policy mainly includes fiscal policy that plays the role of internal stabilizer and fiscal policy that is used as appropriate. Automatic financial stabilizer, referred to as automatic stabilizer, refers to a factor that automatically and immediately changes in the right direction without government intervention and suppression, thus stabilizing the total demand, also known as internal stabilizer. A discretionary fiscal policy is also called discretionary fiscal policy. It refers to a country's purposeful and targeted actions to change fiscal expenditure and increase or decrease taxes in order to stabilize prices, curb economic cycle fluctuations, achieve full employment, and then achieve an effective balance between total supply and total demand. Including expansionary fiscal policy and tight fiscal policy.
2. Expansive fiscal policy, including tax reduction and increasing government expenditure. Through tax reduction, enterprises can expand production and people have more disposable income to spend; The increase in government expenditure includes two parts. The increase of government purchase expenditure can stimulate production, and the increase of transfer payment can stimulate effective demand, thus promoting economic development.
Chapter VII Promoting Fair Distribution
Case:
In order to solve environmental problems and achieve sustainable development, economically developed countries, especially the European Union countries, began to levy environmental taxes in the 1970s. Since 1980s, environmental tax has been attached great importance by developed countries, and it has gone through the process from collecting scattered and individual environmental taxes to gradually forming environmental tax system. Including pollution taxes on waste gas emissions, waste water emissions, garbage emissions and noise. Pollution tax on agricultural pollutants, etc.
In addition, the adjustment of the cited tax system mainly includes: first, canceling the provisions in the original tax system that do not meet the requirements of environmental protection and are not conducive to sustainable development; The second is to adopt new tax measures that are beneficial to environmental protection in the original tax categories. Judging from the adjusted taxes, consumption tax, income tax and motor vehicle tax are more prominent.
Question: 1. Substitution effect of tax. Taxation and externalities.
Analysis:
1. Substitution effect of tax on consumers.
Government taxation leads consumers to reduce their purchases of taxable goods and heavily taxed goods, and increase their purchases of non-taxable goods and lightly taxed goods. Therefore, tax has a substitution effect on consumers' choice.
(2) Due to government taxation, producers will reduce the production of taxable goods and heavily taxed goods, and increase the production of non-taxable goods and lightly taxed goods, thus producing a substitution effect of taxation on producers' choice.
(3) The impact of tax on the total rate of return is that the total rate of return decreases due to tax payment. If its influence reduces the attractiveness of investment to taxpayers and leads taxpayers to replace investment with consumption, that is, the substitution effect of tax on investment occurs.
2. Definition of externalities: The phenomenon that some economic entities' behaviors have influenced other economic entities, but they have not borne their due costs or received due compensation. Defining externalities in the simplest terms refers to the influence of one person's behavior on the welfare of others. When solving externalities, taxes can guide producers and consumers to internalize such externalities and reduce externalities through substitution effects.
Chapter IX Government Failure
Case: road construction.
Suppose that in a country composed of 100 farmers, a road construction plan implemented by the government needs to be voted. There are many suggestions about the road construction plan, but each suggestion can only benefit some farmers.
Question: Analyze the results of simple majority voting.
Analysis: If the simple majority rule is adopted, the adopted proposal must benefit at least 5 1 farmer. If 5 100 farmers can benefit from a road construction proposal according to their common interests and form an interest group, then after the proposal is passed, the actual road construction cost will be shared by all 100 farmers, and the benefited 5/kloc-0 farmers will only share 565438. In fact, when a road construction plan is completely implemented by these 5 1 farmers through consultation, they may agree to a road construction plan worth 1 10,000 yuan. But now it is borne by 100 farmers. This 5 1 farmer's cooperation is enough for any proposal to be passed under the simple majority system. Therefore, if they are still willing to pay 1 10,000 yuan for road construction, at this time, they will support a project with a value as high as 100+(5 1%), that is, in this case, government expenditure has increased by 960,000 yuan. It can be seen that the application of the simple majority principle and the existence of interest groups can easily make government expenditure exceed the necessary limit.