Differentiate between social equity and social equality and indicate which of the two is required
for improvement in social welfare in a country that has a history of inequality.
2.1. Critically discuss any three Macroeconomic and at least two Microeconomic reasons for growth
in government expenditure.
Question 3 (25 Marks)
Differentiate between private goods and public goods and then illustrate and discuss why in the
provision of private good the summation is horizontal while it is vertical in the case of the provision
of public good.
Individual is allocated the same resources or opportunities.
Appreciates that each person has different circumstances. Therefore allocates the exact resources and opportunities needed to reach an equal outcome.
Reasons for the increase in government spending
Income elasticity. If the quantity of commodities demanded increases due to increase in income, the government increases its spending to provide quality public goods.
Funding of government parastatals could also increase the government spending.
These are goods which are provided by the nature or the government for free use by the public.
Goods manufactured and sold by the private sector to satisfy the consumer needs and wants.
Summation of provision of public goods
Unlike public goods, the public does not necessarily to agree on a given quantity of a private good, and any person can consume more of the private good than another at a given price. The illustration is as shown