Government regulation is best applied in cases_____. a. where the marginal benefit of the regulation is greater than the cost of the bureaucracy b. where imposed rules can increase efficiency more than govt. production would c. where the marginal benefit of regulation improves the cost efficiency of the producers d. where imposed rules can increase […]
Which of the following is a normative economics statement? a. An increase in the minimum wage will reduce teenage employment. b. Increasing the minimum wage will result in more votes for progressive candidates. c. Raising the minimum wage would greatly increase labor costs in certain industries. d. Raising the minimum wage is a poor idea […]
Insufficient _____ can make regulation counterproductive. a. information b. funding c. monitoring d. time ANSWER a
Which of the following statements about the social welfare function is not true? a. It can be thought of as a set of indifference curves that depict the wealth of the entire society. b. It does not employ interpersonal utility comparisons. c. It is one possible method for evaluating the public interest/ d. It allows […]
Government regulators know that pollution is a problem in Cleveland. However, information on the social cost of this externality is difficult to come by. Which of the following statements best describes how this information problem might manifest itself? a. Well-intentioned regulators monitor a handful of polluting factors and are unable to determine how much they […]
Which of the following would not satisfy the potential compensation criterion? a. The winners from a policy change could compensate the losers so everyone would be better off. b. The policy change was approved by a unanimous vote. c. The policy change was a Pareto superior move d. The policy change moved from a Pareto […]
Government regulation can improve economic efficiency if _____. a. regulators encourage uncompetitive markets to act competitively b. regulators have private information firms do not have c. regulators are able to coordinate inter-industry actions to achieve efficiencies d. regulators base their actions on the revealed preferences of market participants ANSWER a
When comparing public and private schools, the voluntary choice of going to a private school _____. a. is a Pareto optimal move b. is a Pareto superior move c. is neither Pareto optimal nor Pareto superior d. cannot be evaluated according to the Pareto criteria ANSWER b
The fact that government has a monopoly on force _____. a. means that government can protect individual rights but is strong enough to violate them b. means that government can protect individuals rights yet is strong enough not to violate them c. means that individuals have secure and well-defined property rights d. means that individuals […]
Which of these is an argument for using the potential compensation criterion? a. If the winners can compensate the losers, no one is harmed by employing the criterion. b. The criterion does not employ interpersonal utility calculations. c. If employed over a large number of policy changes, everyone should enjoy a net gain in the […]
