ECONOMICS HOMEWORK:

QUESTION NUMER: 6 & 7

Q6 a) The primary difference between public- and private-sector jobs is that public-sector jobs
are generally within a government agency, whilst private-sector jobs are those where
employees are working for non-governmental agencies. This includes jobs within individual
businesses as well as within other types of company organizations
Q6 b) Resources are allocated through 4 basic things which is, land, labor, capital and
enterprise. Resources are both allocated by private and public sector and the main perperstive
of public is to provide people with necessities like, roads, traffic and streetlights because public
sector is controlled by the government, so their main objective is to provide public. But on the
other hand, private sector allocates or produce to gain maximum profit so they will produce
demerit goods to gain more profit which is highly discouraged by the government, so they
impose high taxes on demerit goods.
Disadvantage of allocation resources through public sector is risk of producing ineffective goods
because the people working there are not probably professionals so the product might not
satisfy the people need. The workers are not motivated enough to work because they will be
given fixed salary no bonuses or promotion.
Q6 C) Disadvantage of building an airport there is that the local people might lose their property,
and some may dislike it because of noise generated by the pans and the smell generated by the
plans. Large investment would be done, and these investments can be used anywhere else. It
requires huge cost so it may even cause economic crisis.
Q6 D) as government is going to pay for the airport so it will introduce high taxes on the public.
But in my opinion government should introduce flat tax on passengers only.
If government could not bear the cost by their own so they should introduce indirect taxes to
compensate the additional but it will put on those people to who are not travelling and due to
taxes prices are increased so maybe people might stop using airplanes due to higher cost
If they want to safe the travel industry so they should introduced flat tax solely on travelling
passenger because it will higher the cost of travelling but not that much but people will be willing
to pay for the ticket if they will get there desired things in there.
So, in my opinion they should introduce flat tax on passengers only because they are one
travelling so they should pay only, and I guess it will be liked by the travelers.

Q7 A)1) Taxes can be either direct or indirect. A direct tax is one that the taxpayer pays directly
to the government. These taxes cannot be shifted to any other person or group. An indirect tax
is one that can be passed on-or shifted-to another person or group by the person or business
that owes it.
2) A regressive tax is the exact opposite. Higher-income taxpayers pay a smaller percentage of
their income than lower-income taxpayers because the tax is not based on ability to pay.
Whereas
a progressive tax is a type of tax that takes a larger percentage of income from taxpayers as
their income rises.
Q7 B) Government imposes taxes to generate revenue to finance government spending. The
administrative machinery of a country may collapse if there is no money to maintain it; tax
therefore forms one of the sources of such money. The government uses part of the money
generated by taxation in providing social amenities.
This is done by heavily taxing foreign-made goods in order to discourage their importation.
Taxes are imposed on de-merit goods because they are considered highly harmful for the
society, so government imposes high taxes on those goods to make their consumption low.
Taxation is used as a fiscal device to counter inflation and deflation. Tax is used to counter-act
inflation and deflation. Moreover, this is done by raising tariff to discourage the importation and
consumption of foreign-made goods and lowering excise duties in order to encourage the
production and consumption of locally made goods.
Q7 C) Income tax refers to annual taxes levied by the federal government and most state
governments on individual and business income. By law, businesses and individuals must file
federal and state income tax returns every year to determine whether they owe taxes.
If income taxes are increased so government will get more earing which is going to affect the
public in a positive manner because government will have enough money to spend on public
necessities which will have positive effect on the public. Government will spend this money on
defense and health system.
But on the hand disadvantage of higher taxes may affect the people because inflation will
increase as prices will be higher due to taxation and people will be discouraged to do purchase.
The second draw back will be that flow of money will be less because sales would be less due
higher prices. Unemployment will occur because many businesses would like to take out their
existing workers to cover the cost without making loss. Then personal disposal income will
become more less as higher taxes will take most share of it. People will stop saving and start to
spend more and there living standing will be deteriorated.
So mostly the public will be mostly affected by increasing the income tax because their income
will not satisfy them and they will stop saving and spending and they will stop purchase
unnecessary things like, fashionable clothes and other stuff. So, in my opinion government
should lower the income tax rate to control the economic situation. And maybe people start to
rob or theft which may cause law and order situation in the country.

BY: DANYAL TAHIR

CLASS:11 _C