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

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.

A)condition 1&2 are satisfied
B)condition 1 &3 are satisfied
C)condition 2 &3 are satisfied
D)condition 1, 2 &3 are satisfied

Answer 1

condition 1, 2 &3 are satisfied

Question 2

The Coase theorem has problems because

A)generally, bargaining costs are not zero.
B)individuals are not concerned with others.
C)markets always exist.
D)all of the above.

Answer 2

generally, bargaining costs are not zero.

Question 3

The marginal rate of substitution is

A)the slope of the pareto curve.
B)the slope of the contract curve.
C)the slope of the utility possibilities curve.
D)the slope of the indifference curve.

Answer 3

the slope of the indifference curve.

Question 4

A public good is

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

Question 5

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

A)pigouvian taxes
B)regulation
C)assigning property rights and permitting bargaining
D)all of the above

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

A)the benefits of tough new clean-air regulations in the past decade were five to seven times greater than their costs
B)the most efficient way to control pollution is through pigouvian taxes
C)the 1990 clean air act has not affected the problem of acid rain
D)environmentalists are generally supportive of cost-benefit calculations in assessing

Question 7

impossibility theorem was propounded by

A)hicks
B)arrow
C)kaldor
D)scitovsky

Question 8

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

A)terrorism
B)an organic approach to public policy questions
C)inadequate rule of law
D)geographical (e) hobbits

Question 9

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

A)in most of the world, food production has well outpaced the growth of population
B)democracy may be able to help prevent famines from occurring
C)in countries experiencing famine, security and order must be established before the famine can be contained
D)famines are mainly caused by natural disasters or pestilence

Question 10

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

A)the pesticide ddt may have done more good than harm in some countries before it was banned
B)despite their other problems, eastern european countries did a good job protecting the environment during the communist era
C)the costs of environmental regulation exceed their benefits
D)recycling is an economically inefficient way of reducing the human impact on the environment

Question 11

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

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
B)the right way to think about saddam hussein's government is basically as if he were the head of a mafia organization
C)saddam hussein's government could be described as adhering to an organic philosophy
D)the biggest problem in iraq under saddam hussein was a lack of rule of law