Exam 23: Microeconomic Policy, Economic Reasoning, and Beyond

Many economists, both liberal and conservative, were critical of much of the early environmental legislation. An important reason for the economists' critique was that economists:

Cannibalism is illegal. What issue in the text does this law best illustrate?

A person will pay $1,000 (and not more) extra for a bigger car that he or she feels is safer. This car will reduce the chance of dying in an automobile accident by 1/550. That means that the buyer is implicitly valuing his or her life at roughly:

By definition, inalienable rights:

Suppose a radar-activated braking system that can help prevent crashes is an option on a new car. It costs $600 and reduces the chance of dying in an auto accident by 1/700. The implicit value placed on life by a person who has the system installed is therefore:

According to standard economic theory, rational individuals:

Which of the following statements is true?

Which of the following programs would redistribute consumer surplus in favor of those with less surplus in an otherwise free market economy?

How do the concepts of market failure and failure of market outcome relate to the concept of economic efficiency?

When a purely competitive market is in equilibrium:

Economists deduce the value people place on their own lives by looking at what people will pay to reduce the probability of death.

Which of the following is one of the reasons economists sometimes differ in their views on social policy?

Economists' suggestions for social policy are determined by subjective value judgments as well as by objective economic analyses.

Which of the following best exemplifies a failure of market outcome?

Sin taxes are most effective when imposed on goods for which:

Suppose a radar-activated braking system that can help prevent crashes is an option on a new car. It costs $600 and reduces the chance of dying in an auto accident by 1/700. The implicit value placed on life by a person who does not have the system installed is therefore:

Performing cost/benefit analysis involves:

"People are at war with themselves. Part of them says that they want to quit smoking, but another part says they need a cigarette right now. Or part of them says they want to be healthy, and another part says they need to satisfy their cravings for fatty food and sweets." These statements are suggesting that:

Public choice economists point out that when the government enters into the market, the incentive is to achieve its goal in the least-cost manner.

Public choice economists use models that focus on economic incentives as applied to politicians.