Equity and efficiency _____. Thus, _____. a. are always consistent with each other; trade-offs between the two are necessary b. are never consistent with each other; trade-offs between the two are unnecessary c. might be consistent in certain situations; trade-offs between the two might be necessary d. might be consistent in certain situations, trade-offs between […]
Using the utilitarian criterion, it is possible that slavery could be in the public interest. a. True b. False ANSWER a
Normative analysis is very important to public finance because _____. a. public policy enacted by government is the result of voting by individuals b. positive analysis is full of value judgments c. we should be concerned with how the world works d. voluntary exchanges are economically efficient ANSWER a
The equilibrium level of regulation is _____. a. determined where marginal political gains to the special interests are equal to the marginal political costs of the foregone regulation b. determined where the marginal benefits from the regulation are equal to the marginal costs of the regulation c. determined where the marginal political benefits to the […]
The transitional gains trap is a _____. a. by-product of some types of regulation b. associated with the move from a socialist to a market society c. associated with the move from a communal to a socialist society d. by-product of changing the rate at which capital gains are taxed ANSWER a
Production and exchange is beneficial as long as the demand curve lies below the supply curve. a. True b. False ANSWER b
Jane is a dietician in a city that twenty years ago voted to restrict the number of dieticians in the city to five and to regulate their prices. Although the city has tripled in size during that time (and thus demand has increased), no new dietician licenses have been issued. Over the years Jane and […]
Coercion and force underlie government activity. a. True b. False ANSWER a
Nabamitta is a doctor in a foreign country. When she first began medical school the number of doctors in her country was strictly limited by the government. Although the barriers to becoming a doctor were high, she invested nearly a decade of her life attempting to get a license because she knew if she received […]
A government strong enough to protect individual rights is also strong enough to violate them. a. True b. False ANSWER a
