Discuss the merits of these two different goals.

Q-1) Redistribution programs might be pursued to promote greater equality, or might be pursued to help alleviate the problems of poverty. Discuss the merits of these two different goals. Do you think that one goal would be favored over the other from behind a Rawlsian veil of ignorance? Redistribution might take place through cash transfers, or might take place through in-kind redistribution. Discuss these two methods of redistribution as ways of addressing the goals of greater equality and alleviation of the problems of poverty.Q-2) Income transfer programs provide income to individuals with low incomes, but the benefits are reduced or eliminated as individuals’ incomes rise. For simplicity, assume that individuals receive a certain guaranteed level of income if they have no earned income, but as their earned income rises, the amount of transfer income falls, and the transfer eventually is eliminated at a certain level of earned income. (a) Will recipients be better off participating in the transfer program as compared to not participating? (b) Will recipients have a higher level of dollar income if they participate in the program? Use graphs to help illustrate your answer.Q-3) Philosopher John Rawls has argued that a fair society is one that would be approved of from behind a veil of ignorance. Explain what Rawls means, and more generally, explain the contract Arian idea of fairness. Next, explain Pareto’s concepts of social welfare and compare Rawls’ vision of the social welfare with Pareto’s.Q-4) The government has hired you to advise them on the merits of a project that is being proposed. The project is expected to generate benefits of 14 million dollars today, 5 million dollars in one year from today, and 1 million dollars in two years from today. (These are the only years of concern.) The project costs nothing today, but will cost 20 million dollars in two years. Assume the interest rate is 10%. If the benefit-cost ratio is greater than 1, the project should be allowed. What is your policy suggestion?Q-5) Suppose that all people living in a suburban neighborhood of some big city work in downtown area and the only way to commute there is to take highway I-1. Now assume that local authorities built a new road I-2 going by the neighborhood, which reduced the commute time to downtown by 10 minutes a day. As a result of this improvement the average house price went up by $25000. Based on this information discuss how you would go about measuring the value of time (I don’t want the exact numbers, just discuss how you would proceed and what problems you expect).Q-6) Suppose that some state official advocates building a new highway. Among other arguments in favor of this project, he claims that (1) the construction will create a lot of jobs in the state, (2) it will benefit local businesses located along the proposed highway, (3) it will increase the value of the land located along the highway. Discuss the merits of these arguments.

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