Question

Discuss the basic idea behind the pure theory of public expenditure. Also explain the theoretical rationale behind lindahl pricing.

Answer 1

Answer:

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Answer 2

ANSWER:

BASIC IDEA BEHIND PURE THEORY OF PUBLIC EXPENDITURE:

Samuel’s theory emphasizes on the allocation of resources optimally in private and public goods. This theory is considered to be the modern theory on public goods. The basic idea here is maintaining the production of public and private goods in an equilibrium.

THEORY OF RATIONALE BEHIND LINDAHL PRICING:  

Lindahl Pricing by Erix LIndahl is the concept of benefit taxation in which the willingness of individuals to pay for every single public goods based on their marginal benefits thereby contributing to the social wealth is exposed. This theory is being optimal to the utility and value of every goods.