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.

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

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

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

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?

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

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

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

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?

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?

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

Accepted Answer

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

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

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.

The Coase theorem has problems because

The marginal rate of substitution is

A public good is

Which method can help in obtaining a welfare improvement if externalites exist?

According to the required reading from the 2003 Washington Post, a recent study by the U.S. Office of Management and Budget found that

impossibility theorem was propounded by

According to a required reading from the 2003 Economist, the biggest problem facing Indonesia's economy is

According to a required reading by P.J. O'Rourke, which of the following statements is false?

According to a required reading by P.J. O'Rourke, which of the following statements is false?

The assigned Washington Post Op-Ed by Daniel Chirot can be interpreted as asserting that