Exam 23: Microeconomic Policy, Economic Reasoning, and Beyond

Most economists would agree that each human life is beyond price.

Pareto optimal policies are almost nonexistent in the real world.

Which of the following ultimately must decide what externalities should be addressed?

Direct shipment of wine to individuals is illegal. Some wineries want the law revoked. They argue that the ability to ship directly to consumers helps small wineries and that shipping bans unfairly protect home-state wineries, raising prices to consumers. Others argue that the bans allow states to collect tax revenues and to keep wine from being sold to minors. What would most economists say about whether this ban should stay or be eliminated?

Failure of market outcomes occurs when:

Politics enters into the determination of economic policy in a positive way because:

The main reason the usefulness of Pareto optimal policies is limited as a policy guide is that:

A proposal to build a dam on a wild river may look like a good idea from the cost/benefit study done by the Army Corps of Engineers, but an analysis done by the Sierra Club might suggest that the dam would be a complete waste of money. Differences in cost/benefit studies such as this are expected because:

Economic policy in the real world reflects:

Robert needs to raise $100,000 to pay for an operation that will save his wife's life. The only way he can raise the money is to sell one of his kidneys to a wealthy man in need of a kidney transplant. This is an example of a trade that:

What is one reason the United States produces luxury cars such as the Chevy Corvette but still does not provide health care for all individuals?

Mainstream economists focus on:

According to work by Amartya Sen, the best way from a society's point of view to deal with inalienable rights is to:

Economists are trained to be as:

Usually policy makers ask advice from economists whose values are very different from their own.

When workers earn below-subsistence wages in a free market economy, some workers will starve. As a result, the supply of labor curve will shift:

If the government imposes a sin tax on alcohol and the demand for alcohol is inelastic, the tax will cause a:

Pareto optimal policies will improve life for:

A government airline safety regulation reduces the probability of a fatal airline crash by 0.005. If the costs associated with each airplane crash are equal to $600 million and the costs of performing more frequent safety inspections equal $4 million, the regulation is:

The cost/benefit approach that economists agree on requires an economist to determine a quantitative cost and benefit for: