Summer 2022 - ECON 392 D100

Public Economics: Role of Government (3)

Class Number: 2723

Delivery Method: In Person


  • Course Times + Location:

    Th 12:30 PM – 2:20 PM
    AQ 3182, Burnaby

  • Prerequisites:

    ECON 201 with a minimum grade of C-; 60 units.



The study of the normative rationale for government in a market economy through an analysis of distributional issues, public goods, externalities, non-competitive market structures, and asymmetric information. Quantitative.



This course studies the economic role of government from a normative perspective. Important topics are: Welfare Economics; Pareto efficiency; the First and Second Theorems of Welfare Economics; public goods; externalities; inequality; and behavioral public economics.

Course Outline and Readings:


  • Introduction to Public Economics (notes and HM chapter 1)


  • Welfare Economics: A Good Society from an Economics Perspective (notes)
    1. Assumptions and Principles Underlying Welfare Economics
    2. Characterizing a Good Society
    3. i) Pareto Efficiency
    4. ii) The Best Outcome and the Overall Welfare Condition
    5. Results Regarding a Good Society


  • Complete Decentralization and Competitive Markets (notes + HM chapter 2)
    1. Markets and Efficiency (First Theorem of Welfare Economics)
    2. Markets and Distribution (Second Theorem of Welfare Economics)


  • Public Goods (notes and HM chapter 6)
    1. About Public Goods
    2. Welfare Maximization and Pareto efficiency with Public Goods
    3. Private (Market) Provision of Public Goods
    4. Asymmetric Information and Preference Revelation


  • Externalities (notes and HM chapter 8)
    1. Pareto Efficiency with externalities
    2. Private Market Behavior
    3. Solutions


  • Distributive Justice
    1. Failure of the Second Theorem (notes and HW chapter 13)
    2. Second-Best Efficiency
    3. Inequality (notes and HW chapter 14)
    4. Operationalizing the Welfare Function (notes and HM chapters 14)
    5. Policies Aimed at Inequality (notes)


  • Behavioural Public Economics—if time permits (notes and HM chapter 3)





  • Two Term Tests (25 percent each) 50%
  • Final Exam 50%



Hendricks, J. and G. D. Myles, Intermediate Public Economics, 2nd Edition, MIT Press, 2013.


Department Undergraduate Notes:

Please note that, as per Policy T20.01, the course requirements (and grading scheme) outlined here are subject to change up until the end of the first week of classes.

Final exam schedules will be released during the second month of classes. If your course has a final exam, please ensure that you are available during the entire final exam period until you receive confirmation of your exam dates. 

Students requiring accommodations as a result of a disability must contact the Centre for Accessible Learning (CAL) at 778-782-3112 or


Registrar Notes:


SFU’s Academic Integrity web site is filled with information on what is meant by academic dishonesty, where you can find resources to help with your studies and the consequences of cheating.  Check out the site for more information and videos that help explain the issues in plain English.

Each student is responsible for his or her conduct as it affects the University community.  Academic dishonesty, in whatever form, is ultimately destructive of the values of the University. Furthermore, it is unfair and discouraging to the majority of students who pursue their studies honestly. Scholarly integrity is required of all members of the University.


Teaching at SFU in summer 2022 will involve primarily in-person instruction.  Some courses may be offered through alternative methods (remote, online, blended), and if so, this will be clearly identified in the schedule of classes. 

Enrolling in a course acknowledges that you are able to attend in whatever format is required.  You should not enroll in a course that is in-person if you are not able to return to campus, and should be aware that remote, online, or blended courses study may entail different modes of learning, interaction with your instructor, and ways of getting feedback on your work than may be the case for in-person classes.

Students with hidden or visible disabilities who may need class or exam accommodations, including in the context of remote learning, are advised to register with the SFU Centre for Accessible Learning ( or 778-782-3112) as early as possible in order to prepare for the summer 2022 term.