Question 1

Compare and contrast each of the following pairs of economic terms:
A. Ability-to-pay principle versus benefits-received principle
B. Merit and demerit goods
C. Government purchases versus government expenditures
D. Means-tested and non-means-tested transfer payments
E. Progressive tax versus regressive tax
F. Public choice theory and public interest theory analyses of choices in the public sector

Accepted Answer

The answer of Compare and contrast each of the following...

Question 2

The presence of external benefits may result in government action because the external benefits are not included in the market price of a good.

Accepted Answer

External benefits are positive spillover effects that are not fully reflected in the market price of a good. Since the market price only reflects the private benefits and costs of production and consumption, government intervention may be necessary to ensure that the external benefits are also taken into account. This could involve policies such as subsidies, tax incentives, or regulations to promote the production or consumption of goods with positive externalities.

Question 3

If the purpose of taxation is to raise revenue, would it be better for the government to levy taxes on products whose demand is elastic or inelastic? Explain. Are there any other reasons why governments levy taxes? Explain.

Accepted Answer

The answer of If the purpose of taxation is to...

Question 4

If the purpose of taxation is to raise revenue, would it be better for the government to levy taxes on products whose demand is elastic or inelastic? Explain. Are there any other reasons why governments levy taxes? Explain.

Accepted Answer

The answer of If the purpose of taxation is to...

Question 5

Behavioral economics suggest that individuals have bounded willpower and have a bias towards future consumption and future utility.

Accepted Answer

Behavioral economics suggests that individuals often have bounded willpower, but it typically argues that people have a present bias, meaning they prefer immediate gratification over future benefits, rather than a bias towards future consumption and utility.

Question 6

The following statement is attributed to Justice Oliver Wendell Holmes: "Taxes are what we pay for a civilized society." Do you agree or disagree with his statement? Why or why not? What do you consider to be the most relevant considerations involved in evaluating this statement?

Accepted Answer

The answer of The following statement is attributed to Justice...

Question 7

Economist Herbert Simon suggested that individuals possess limited abilities and limited time for processing information resulting in sub-optimal problem solving and bounded rationality.

Accepted Answer

Herbert Simon's theory of bounded rationality suggests that individuals have limits to their cognitive abilities and information processing abilities, leading to sub-optimal decision making.

Question 8

Give several examples of market failure. Discuss what, if any, corrective action could reduce such problems.

Accepted Answer

The answer of Give several examples of market failure. Discuss...

Quiz 15: Issues in Labor Markets: Unions, Discrimination, Immigration

The presence of external benefits may result in government action because the external benefits are not included in the market price of a good.

If the purpose of taxation is to raise revenue, would it be better for the government to levy taxes on products whose demand is elastic or inelastic? Explain. Are there any other reasons why governments levy taxes? Explain.

If the purpose of taxation is to raise revenue, would it be better for the government to levy taxes on products whose demand is elastic or inelastic? Explain. Are there any other reasons why governments levy taxes? Explain.

Behavioral economics suggest that individuals have bounded willpower and have a bias towards future consumption and future utility.

The following statement is attributed to Justice Oliver Wendell Holmes: "Taxes are what we pay for a civilized society." Do you agree or disagree with his statement? Why or why not? What do you consider to be the most relevant considerations involved in evaluating this statement?

Economist Herbert Simon suggested that individuals possess limited abilities and limited time for processing information resulting in sub-optimal problem solving and bounded rationality.

Give several examples of market failure. Discuss what, if any, corrective action could reduce such problems.