Translating the preferences of each individual into the preferences of the group is _____. a. a challenge faced only by clubs b. a challenge faced by all collective decision making organizations c. inherent in all decision making d. a challenge faced only by government ANSWER b
Date: September 9th, 2020
The equilibrium level of regulation is where the marginal political benefits to the special interests are equal to the marginal political costs of the foregone regulation. a. True b. False ANSWER a
Date: September 9th, 2020
The benefit principle views _____. a. a tax as the price that is paid for a government-supplied activity b. all government activity as beneficial c. all taxes as being beneficial if they are spent in the public interest d. all Pareto-efficient moves as beneficial ANSWER a
Date: September 9th, 2020
The Coase Theorem does not imply which of the following? a. Resources will be allocated efficiently in the absence of transactions costs. b. Resources will move to their highest valued use in there are no transactions costs. c. The initial allocation of property rights does not matter to the parties involved. d. The allocation of […]
Date: September 9th, 2020
In 1940 _____ of the population over 25 had a college degree. a. less than 5 percent b. around 10 percent c. around 15 percent d. more than 20 percent ANSWER a
Date: September 9th, 2020
Helping the poor is not necessarily the same thing as promoting greater equality. a. True b. False ANSWER a
Date: September 9th, 2020
Coase made famous a court case between a doctor and a confectioner. Suppose that exact case happened again and transactions costs were absent. When would we be sure that resources were inefficiently allocated? a. If the confectioner wins the property right to make his confections. b. If the doctor wins the right to prevent the […]
Date: September 9th, 2020
The justification for government action based on the argument that everyone agrees to be coerced if everyone else is forced as well is not compatible with the criterion of Pareto superiority. a. True b. False ANSWER a
Date: September 9th, 2020
What is the transitional gains trap? In New York, in order to be legal a cab driver must have a medallion (i.e., a license) to operate. With respect to New York cab drivers who, if anyone, received transitional gains? What if the medallion program were ended tomorrow. Who would be harmed? ANSWER The transitional […]
Date: September 9th, 2020
Describe the holdout problem with emphasis on how it might lead to resource being allocated inefficiently. Give three private ways to possibly overcome the holdout problem. What will be an ideal response? ANSWER The holdout problem arises when unanimous agreement is required for a collective action. The holdout problem can prevent Pareto superior moves […]
Date: September 9th, 2020
