The efficiency in resource allocation, resource allocation and scarcity problem. Rationale for government economic activity, collective choice. The concept of public goods, externalities, optimal size of the government, Lindahl equilibrium, Coase´s theorem, voting models of allocation, microeconomics of state economic enterprises and political decision making process, income redistribution, public sector pricing. Optimal Taxation and the Provision of Public Goods, Optimal Taxation in the Presence of Externalities, The Theory of Tax Reform, Optimal Income Taxation, Taxation and Firm Behaviour.

• To have knowledge on public goods, externalities, optimal size of the government, rationale for government economic activity. • To be able to analyze of the voting models of allocation