Exam 24: Globalization and International Impacts on the Economy

A consequence of a negative externality is that social costs __________ private costs,and the efficient level of output __________.

Economist B thinks that it is important to identify the condition(s)under which the case for government is strongest.With respect to the provision of nonexcludable public goods,she says

Exhibit 37-1 -Refer to Exhibit 37-1,where the higher the number,the better the position for the person to whom the number is connected.Jaden and Karen are currently in box 4,each receiving 10.they would like to move to box 1,where each receives 12.Without someone to ________________ their agreement,moving from box 4 is ______________________.

In the prisoner's dilemma setting for producing and stealing,a tax imposed on participants could end up changing the payoff matrix so that

When the government imposes a tariff on imported goods,it _____________ prices for domestic consumers,________________ consumers' surplus and _________________ the producers' surplus for domestic producers.

A nonexcludable public good is

Special interest group Z receives a 1/200^th slice of the economic pie.Its net benefit from both an economic growth policy and a transfer policy is $30,000.How much does the size of the economic pie (Real GDP)need to grow before group Z is indifferent between the two policies?

Suppose that for Alicia the marginal benefit (MB)of producing is $75 and that the marginal cost (MC)of producing is $5.Suppose also that her marginal benefit of stealing is $85 and the marginal cost of stealing is $5.Is Alicia currently maximizing utility in terms of producing and stealing? If not,should she produce more and steal less,or produce less and steal more to move toward utility maximization?

Government provides a nonexcludable public good that no one wants.This situation is most closely related with:

A positive externality exists and government wants to impose a subsidy in order to bring about an efficient outcome.To accomplish its objective,government must set the subsidy equal to marginal

Special interest groups are very unlikely to push for policies that increase the size of their slice of the economic pie if it means that the overall size of the economic pie will shrink.

Suppose health-care reform Y makes it unlawful for insurance companies to deny insurance to persons with a preexisting disease and sets a fine for those people who do not buy insurance.It follows that if the fine is

In the prisoner's dilemma setting for stealing and producing,both participants end up __________,which turns out to be ________________________ stolen.The government _________ make both participants better off by changing the payoff matrix.

A divisive society is a nonexcludable public _____________ because it comes with ____________.

Special interest group K receives a 1/100^th slice of the economic pie.Its net benefit from either an economic growth policy or a transfer policy is $200,000.In order for group K to be indifferent between the two policies,the economic growth policy would have to make the size of the economic pie (Real GDP)grow by _________________.This type of analysis is used to show that special interest groups tend to press government for ______________ instead of ________________.

Which of the following statements is false?

Most economists believe that the market __________ produce nonexcludable public goods because of the __________.

In making the case against government,discuss the two main points about special interest groups.

Consider a setting in which there is a negative externality,but no positive externality.The market outcome is __________________;government can bring about the ___________________ outcome if it sets a tax equal to the __________________.

Individuals want nonexcludable public good X,but the market does not provide it because of the free rider problem.Government overcomes the free rider problem by ______________ individuals and then either producing good X itself or paying someone to produce it.