Question 1

Suppose you were advocating Larry Summers's view that pollution should be exported to less-developed countries. Explain how this could lead to increased economic growth in both sets of countries.

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Question 2

Based on your reading of the text, briefly list some of the objections that exist against standard economic reasoning.

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The answer of Based on your reading of the text,...

Question 3

Robert Nozick's entitlement theory would support an entrepreneur such as Bill Gates who has gotten very rich by creating things that people value.

Accepted Answer

Robert Nozick's entitlement theory is based on the idea that people are entitled to what they have earned through voluntary exchange or transfer, without interference from others. Therefore, if Bill Gates has gotten rich by creating things that people value, he is entitled to his wealth according to this theory.

Question 4

Consider the market for human kidneys. Using supply and demand, graphically illustrate how the price of $0 is affecting the legal market for kidneys. Assume that a small number of kidneys are donated for free each year.

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The answer of Consider the market for human kidneys. Using...

Question 5

Robert Nozick would be concerned about the vast amount of wealth accumulated by Lady Gaga, most likely suggesting that part of her wealth be redistributed to the less fortunate.

Accepted Answer

Robert Nozick was a philosopher who believed in minimal government interference and maximum individual freedom, including the right to accumulate wealth through legal means. Therefore, he would not support redistributing Lady Gaga's wealth to the less fortunate.

Question 6

Income inequality is not a problem if it results from voluntary transactions in the marketplace, according to Nozick's entitlement theory.

Accepted Answer

Nozick's entitlement theory holds that individuals have a right to the fruits of their labor and any property they acquire through voluntary transactions, as long as they do not violate the rights of others. Therefore, if income inequality results from voluntary transactions in the marketplace, it is not considered a problem under this theory.

Question 7

Utilitarians will always favor the society that comes closest to equalizing the distribution of wealth across all individuals.

Accepted Answer

While utilitarians prioritize maximizing overall happiness and well-being in society, they do not necessarily advocate for equalizing the distribution of wealth. Instead, they may support policies that lead to the greatest overall happiness, even if this means some individuals have more wealth and others have less. Utilitarians would be more likely to support policies that reduce poverty and increase access to basic necessities, rather than focusing solely on wealth redistribution.

Question 8

When it comes to redistribution, a utilitarian approach tries to determine which people can generate the greatest income with additional utility.

Accepted Answer

A utilitarian approach to redistribution focuses on maximizing overall happiness or utility, not on determining who can generate the greatest income.

Question 9

Utilitarians try to maximize the benefits going to society's most disadvantaged class.

Accepted Answer

Utilitarians aim to maximize overall happiness or utility, not specifically to benefit the most disadvantaged class.

Question 10

The concept of utility could refer to "happiness" or "satisfaction."

Accepted Answer

Utility is a term used in economics that refers to the level of satisfaction or happiness that a consumer derives from consuming a particular product or service. Therefore, utility is directly related to happiness or satisfaction.

Question 11

Utilitarians do not recognize the incentive-based cost of redistribution.

Accepted Answer

Utilitarians do recognize the incentive-based cost of redistribution, as they take into account the potential economic effects on individuals and society as a whole when making decisions about redistribution.

Question 12

John Rawls argued that a government should maximize the benefits going to society's most disadvantaged class.

Accepted Answer

This principle is known as the "difference principle" and is a key component of Rawls' theory of justice. He argues that a just society is one in which everyone has equal basic liberties and inequalities in wealth and power are arranged to benefit the least advantaged.

Question 13

Utilitarians favor redistribution schemes that maximize total utility in society.

Accepted Answer

Utilitarians focus on promoting the greatest overall happiness or utility in society, which can often require redistribution of resources to address inequalities and promote fairness.

Question 14

Robert Nozick's entitlement theory is a pro-free-trade theory.

Accepted Answer

Nozick's entitlement theory emphasizes the importance of property rights and argues that individuals are entitled to the fruits of their labor, as long as these are acquired through just means. This entails a rejection of redistribution policies and support for voluntary exchanges in a free market. Therefore, Nozick's theory can be characterized as pro-free-trade.

Question 15

Robert Nozick advocated the importance of assessing the distribution of income in a country in order to decide whether an economic system is just or not.

Accepted Answer

Robert Nozick, a libertarian philosopher, argued against assessing the distribution of income for justice, focusing instead on the entitlement theory, which emphasizes the justice of acquisition and transfer of holdings.

Question 16

Utilitarians are not concerned that transferring wealth to the poor reduces an economy's output.

Accepted Answer

Utilitarians believe in maximizing overall happiness and well-being, so they would generally support policies that help alleviate poverty even if it may not maximize economic output.

Question 17

In economics, there is a concept called Pareto optimality. This is the concept whereby parties trade until neither one can be made better-off without making the other worse-off. At that point, both parties are said to have reached a state that is Pareto optimal. Do you think the market for kidneys enjoys Pareto optimality? Why or why not?

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Question 18

Nozick argues that voluntary peaceful trades that lead to income inequality are to be condemned as unjust actions.

Accepted Answer

Nozick argues that voluntary peaceful trades, even if they lead to income inequality, are not inherently unjust. He believes that people should be free to exchange goods and services as long as it is done through voluntary transactions without coercion or fraud. Nozick's theory of justice is based on the principle of entitlement, which states that people have a right to the things they acquire through legitimate means, such as voluntary exchanges. Therefore, income inequality arising from such exchanges is not necessarily unjust, according to Nozick's theory.

Question 19

Robert Nozick's entitlement theory of justice is also known as a libertarian theory of justice.

Accepted Answer

Robert Nozick's entitlement theory of justice is indeed a form of libertarian theory of justice that emphasizes individual rights and freedoms.

Question 20

The practical limit of income redistribution is incentives that affect how much the wealthy earn.

Accepted Answer

Income redistribution policies, such as taxation and social welfare programs, are designed to transfer wealth from the rich to the poor. However, if these policies become too extreme, they may reduce the incentives for the wealthy to work and invest, ultimately leading to a decrease in overall economic growth. Therefore, there is a practical limit to how much income can be effectively redistributed without negatively impacting the economy.

Quiz 21: Economics, Ethics, and Public Policy