Question 1

The M RTS L,K between any two inputs be equal in the production of all commodities. 3. The MRPTx,y be equal to the MRSx,y for any two goods.&#10;A)condition 1&2 are satisfied&#10;B)condition 1 &3 are satisfied&#10;C)condition 2 &3 are satisfied&#10;D)condition 1, 2 &3 are satisfied

Accepted Answer

Conditions 1, 2, and 3 are satisfied because they all relate to the optimal allocation of resources and consumer satisfaction in economic theory. Condition 1 (The MRTS L,K between any two inputs be equal in the production of all commodities) ensures efficient production. Condition 2 (The MRPTx,y be equal to the MRSx,y for any two goods) ensures that the marginal rate of product transformation (MRPT) between any two goods is equal to the marginal rate of substitution (MRS) between those goods, indicating an optimal allocation of resources from a consumer's perspective. Condition 3 is essentially a restatement of condition 2, emphasizing the equality of MRPT and MRS for any two goods, which is a condition for Pareto efficiency in consumption and production.

Question 2

The Coase theorem has problems because&#10;A)generally, bargaining costs are not zero.&#10;B)individuals are not concerned with others.&#10;C)markets always exist.&#10;D)all of the above.

Accepted Answer

The Coase theorem assumes that bargaining costs are zero, which is often not the case in reality. This is a primary reason why the theorem encounters problems when applied to real-world situations.

Question 3

The marginal rate of substitution is&#10;A)the slope of the pareto curve.&#10;B)the slope of the contract curve.&#10;C)the slope of the utility possibilities curve.&#10;D)the slope of the indifference curve.

Accepted Answer

The marginal rate of substitution (MRS) is the rate at which a consumer can give up some amount of one good in exchange for another good while maintaining the same level of utility. It is represented graphically by the slope of the indifference curve.

Question 4

A public good is&#10;A)a good that the public must pay for.&#10;B)nonrival in consumption.&#10;C)more costly than a private good.&#10;D)paid for by the government.

Accepted Answer

Public goods are characterized by their nonrival nature in consumption, meaning one person's use of the good does not diminish the ability of others to use it as well.

Question 5

Which method can help in obtaining a welfare improvement if externalites exist?&#10;A)pigouvian taxes&#10;B)regulation&#10;C)assigning property rights and permitting bargaining&#10;D)all of the above

Accepted Answer

All of the options listed are methods to address externalities and potentially improve welfare. Pigouvian taxes can correct for negative externalities by making it more costly to engage in the harmful activity. Regulation can directly limit or guide behavior to reduce externalities. Assigning property rights and allowing for bargaining (Coase Theorem) can lead to efficient outcomes through negotiation.

Question 6

According to the required reading from the 2003 Washington Post, a recent study by the U.S. Office of Management and Budget found that&#10;A)the benefits of tough new clean-air regulations in the past decade were five to seven times greater than their costs&#10;B)the most efficient way to control pollution is through pigouvian taxes&#10;C)the 1990 clean air act has not affected the problem of acid rain&#10;D)environmentalists are generally supportive of cost-benefit calculations in assessing

Accepted Answer

The study found that the benefits of new clean-air regulations significantly outweighed their costs, indicating a positive impact of these regulations on public health and the environment.

Question 7

impossibility theorem was propounded by&#10;A)hicks&#10;B)arrow&#10;C)kaldor&#10;D)scitovsky

Accepted Answer

The impossibility theorem, also known as Arrow's impossibility theorem, was propounded by Kenneth Arrow. This theorem states that no rank-order voting system can be designed that always satisfies three "fairness" criteria: non-dictatorship, Pareto efficiency, and independence of irrelevant alternatives.

Question 8

According to a required reading from the 2003 Economist, the biggest problem facing Indonesia's economy is&#10;A)terrorism&#10;B)an organic approach to public policy questions&#10;C)inadequate rule of law&#10;D)geographical (e) hobbits

Accepted Answer

The biggest problem facing Indonesia's economy, as highlighted in discussions around the time, is the inadequate rule of law. This issue encompasses challenges such as corruption, weak legal institutions, and inconsistent enforcement of regulations, all of which can significantly hinder economic development and investor confidence.

Question 9

According to a required reading by P.J. O'Rourke, which of the following statements is false?&#10;A)in most of the world, food production has well outpaced the growth of population&#10;B)democracy may be able to help prevent famines from occurring&#10;C)in countries experiencing famine, security and order must be established before the famine can be contained&#10;D)famines are mainly caused by natural disasters or pestilence

Accepted Answer

Famines are often caused by a variety of factors including economic policies, war, and social issues, not just natural disasters or pestilence.

Question 10

According to a required reading by P.J. O'Rourke, which of the following statements is false?&#10;A)the pesticide ddt may have done more good than harm in some countries before it was banned&#10;B)despite their other problems, eastern european countries did a good job protecting the environment during the communist era&#10;C)the costs of environmental regulation exceed their benefits&#10;D)recycling is an economically inefficient way of reducing the human impact on the environment

Accepted Answer

Eastern European countries during the communist era are widely recognized for having poor environmental records, not for doing a good job protecting the environment. Pollution and environmental degradation were significant issues due to industrial policies that prioritized production over environmental concerns.

Question 11

The assigned Washington Post Op-Ed by Daniel Chirot can be interpreted as asserting that&#10;A)inadequate education and lack of knowledge of history in the population is why saddam hussein's government succeeded in ruling iraq for so long&#10;B)the right way to think about saddam hussein's government is basically as if he were the head of a mafia organization&#10;C)saddam hussein's government could be described as adhering to an organic philosophy&#10;D)the biggest problem in iraq under saddam hussein was a lack of rule of law

Accepted Answer

The answer of The assigned Washington Post Op-Ed by Daniel...

Deck 2: Economics and Public Goods: Understanding the Concepts and Challenges