Does education increase economic growth? Explain your answer. What will be an ideal response? ANSWER Yes. While the relationship is not easily quantified, but there does seem to be a positive relationship between education and economic growth. At the same time, however, higher incomes (from economic growth) cause individuals to consume more education, so […]
A disadvantage of unit excise taxes is they create the incentive _____. a. for producers to favor smaller products over larger products b. for producers to favor expensive products over inexpensive products c. for buyers to purchase more of the good then they otherwise would d. for buyers to shift to substitute goods with ad […]
The median voter model examines the outcome of majority rule decisions and _____. a. concludes that the outcome will be the one preferred by the median voter b. assumes that the outcome will be determined by the median voter c. uses the median voter to analyze the decision-making of bureaucrats d. found that the median […]
Describe the argument that education generates a positive externality. Why might this externality not be relevant in terms of economic efficiency? What will be an ideal response? ANSWER Education is often said to produce a positive externality because there are positive spillovers from getting an education for which the consumer of education is not […]
The above figure shows a consumer’s indifference curves for soda and all other goods. Assuming a budget of $100, derive the consumer’s demand for soda for prices of $4 and $10 per case of soda. Estimate the price elasticity of demand for soda. What will be an ideal response? ANSWER At a price of […]
An ad valorem tax on demanders causes the _____ to shift by a constant _____. a. supply curve; percentage b. supply curve; amount c. demand curve; percentage d. demand curve; amount ANSWER c
Give a brief overview of how education attainment and elementary and secondary education spending has changed in the United States since 1940 . What will be an ideal response? ANSWER The percentage of U.S. adults with a high school diploma has changed dramatically since 1940 . In 1940, 24.1 percent of adults had a […]
Rawls argued that agreement on certain rules from behind a “veil of ignorance” would make those rules optimal. a. True b. False ANSWER a
Actions based on the more general Pareto criteria are preferable to actions based on application of interpersonal utility calculations. a. True b. False ANSWER a
For private consumption goods, the optimal number of users is determined by the unanimity rule. a. True b. False ANSWER b
