Question 1

Which of the following statements is true?

Accepted Answer

For public goods, the characteristic feature is that the marginal cost of adding an additional consumer is indeed zero, because public goods are non-excludable and non-rivalrous. This means that one person's consumption of the good does not reduce the availability of the good for consumption by others, and it is not possible to exclude individuals from using the good.

Question 2

Rational ignorance means you and I can go to school each day, eat, sleep and never think twice about the health safety of the products we consume. Name as many products as you can that you use on a regular basis which you count on the federal government to certify as safe.

Accepted Answer

The answer of Rational ignorance means you and I can...

Question 3

Explain the interaction among the ideals of public welfare maximization, regulatory capture, and bureaucratic objectives in enacting policy regarding a controversial vaccine aimed at fighting a potential epidemic.

Accepted Answer

The answer of Explain the interaction among the ideals of...

Question 4

What are the most difficult aspects of the Coase Theorem in solving a problem like spread of a dangerous flu by those who are not vaccinated against it? Assume the vaccine is 99.9% effective.

Accepted Answer

The answer of What are the most difficult aspects of...

Question 5

In Bermuda, there are no rivers or other bodies of water for drinking water. Each home must collect rain water in giant storage tanks, which supplies almost all of the homes' needs. Is water a public good in Bermuda?

Accepted Answer

The answer of In Bermuda, there are no rivers or...

Question 6

"Lines of patients outside the methadone clinic each morning create a negative externality to people waiting for the bus to go to work and school." Criticize or defend this statement.

Accepted Answer

The answer of "Lines of patients outside the methadone clinic...

Question 7

It is possible that pesticides sprayed on coffee bean crops poses unknown threats to the future health of those who consume it. It is also possible that pesticides sprayed on mountain crops runs downward to collect and affect other crops in countries such as Nicaragua, where government testing and regulation standards differs from U.S. The Fair Trade movement, which includes coffee, chocolate and other products, is aimed at making consumers aware of the poor living conditions of workers in countries like Nicaragua. It partners with local growers to insure a wage a bit higher than the local wage to produce a quality of coffee beans that meets the definition of organic. How is the Fair Trade movement seeking to overcome rational ignorance of U.S. consumers? What incentive to U.S. consumers have besides a sense of environmental responsibility to pay a higher price than for other coffees?

Accepted Answer

The answer of It is possible that pesticides sprayed on...

Question 8

Discuss the role of monopoly rents from the welfare loss imposed by the number of physicians supplied being less than the number of physicians demanded. Which parties practice rent seeking? Does this create a deadweight loss or increase market efficiency?

Accepted Answer

The answer of Discuss the role of monopoly rents from...

Question 9

Almost half of all injuries to U.S. soldiers in Iraq have come from surviving attacks with IEDs, Improvised Explosive Devices. Many of the injuries cause traumatic brain injuries and loss of limbs. What positive externality might possibly come from such fatalities?

Accepted Answer

The answer of Almost half of all injuries to U.S....

Question 10

Consider Al. Al, is an alcoholic, spent 15 years in his addiction drinking heavily. For 10 years now, he's been a recovering alcoholic. He attends support meetings and contributes to the care of newly sober alcoholics and addicts. He has turned his life around. Al recently found out he has a rare liver disease. Since liver transplant demand far exceeds the available supply of livers for transplant, a rationing body ranks those waiting for a transplant in a sort of lottery system. Should the ranking committee allow Al on the list? Would your answer change if Al were still a drinking alcoholic? What is different about your reasoning?

Accepted Answer

The answer of Consider Al. Al, is an alcoholic, spent...

Quiz 14: The Role of Government and Public Goods