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Regarding externalities, the goal of command-and-control policies is to try and prohibit a firm's behavior before it occurs. a) True b) False
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- Multiple choice 14. Mark is a Canadian lumberjack whose income increases from $1,200 per week to $1,500 per week. If his demand for restaurant meals rises from 2 to 4 per week then...Select one: a.Ey = 3 b.Ey = 0.5 c.Ey = 2.5 d.Ey = -1 15. Which of the following would help support the argument for legalizing drugs?Select one: a.None of the other choices b.The demand curve for illegal drugs in relatively elastic c.The demand curve for illegal drugs is relatively inelastic d.The demand curve for illegal drugs is perfectly elastic 16. The Philippines Government is thinking of increasing taxes on gasoline and cigarettes in order to raise tax revenue. This would...Select one: a.None of the above are correct b.Be a good idea if gasoline and cigarettes are inelastic goods c.Be a poor idea because people would stop consuming these goods d.Be a good idea if gasoline and cigarettes are elastic goods 17. If Exy > 0 then goods x and y areSelect one: a.Substitutes b.Normal goods c.Inferior goods…True-False-Uncertain. Respond to following statements as True, False, Uncertain and justify your claim. According to the Coase Theorem, government intervention is needed to solve externalities. It always makes sense when a public good is financed by the government. If A is Pareto efficient and B is Pareto inefficient, A must be a Pareto improvement over B. According to Arrow’s impossibility theorem, a democratic society will always make consistent decisions.True-False-Uncertain. Respond to following statements as True, False, Uncertain and justify your claim. Answers that do not provide justification will receive zero points. a) According to the Coase Theorem, government intervention is needed to solve externalities. b) It always makes sense when a public good is financed by the government. c) If A is Pareto efficient and B is Pareto inefficient, A must be a Pareto improvement over B.
- The Coase theorem states that if property rights exist, the number of parties is small, and transactions costs are low, there will be no externalities regardless of who owns the property rights. Select one: True FalseIf an excise tax on cigarettes offsets the negative externalities associated with smoking, it means that: a. The Pareto efficient level of smoking will decline. b. The private marginal benefit of smoking will rise. c. The privately efficient level of smoking will equal the Pareto efficient level. d. The private marginal cost of smoking will decline. 9.In the Principal-Agency relationship in health care markets, the _______ acts as the agent for the ________, the principal. a. Government; insurer. b. Insurer; government. c. Health care provider; patient. d. Patient; health care provider. In the presence of external benefits for a health care service, the private market will generally provide: a. The economically efficient level of output. b. Less than the Pareto efficient level of output. c. More than the Pareto efficient level of output. d. The answer depends on the nature of the benefits1) True-False-Uncertain. Respond to following statements as True, False, Uncertain and justify your claim. Answers that do not provide justification will receive zero points. According to the Coase Theorem, government intervention is needed to solve externalities. It always makes sense when a public good is financed by the government. If A is Pareto efficient and B is Pareto inefficient, A must be a Pareto improvement over B. According to Arrow’s impossibility theorem, a democratic society will always make consistent decisions.
- This scenario pertains to microeconomics course-externalities focusing on Noise Pollution, which has negative effects on human health. As some scientific studies have shown, community members who are residing around airports have been exposed to frequent noise pollution. As a result, some people's stress levels increased leading to an increased risk of high blood pressure and heart disease. Now, assume that this has had happened in San Diego County, CA. The community members or residents sued SD Airport for producing negative externalities- noise pollution. The final decision or the court verdict was in the favor of the community members. But the judge has failed to come up with an economic model to calculate the total costs of negative externality- noise pollution. To construct the model, the Judge has employed economists to come up with the model to measure the total amount of compensation per household identifying who should get how much, and what factors determine the dollar amount…Suppose you are part of an economic analysis team charged with recommending a policy response to pesticide risks. Explain the steps your team should take and why.In order to suppress the spread of a viral disease, the government has resorted to nonpharmaceutical interventions (NPIs) that restrict the mobility of individuals such as quarantine and lockdown. Provide an economic framework, based on private and social benefits and costs that could guide the government in selecting the appropriate form and level of NPI. In the absence of a highly contagious disease, an individual engaging in activity x does not externalize any cost to others. In the presence of the disease, then an infected individual can transmit the disease to others during the performance of his or her activities. a. Discuss the nature of the externality, if there is any.
- Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. If the question prompts you to “Calculate,” you must show how you arrived at your final answer. Soybeans are produced and sold in a perfectly competitive market. The fertilizers used in soybean production generate a negative externality by seeping liquid contaminants into local rivers. (d) Assume instead of a lump-sum tax, the government decides to impose a per-unit tax equal to the marginal external cost. (i) On your graph in part (a), indicate the new market equilibrium quantity, labeled QN. (ii) What will happen to the deadweight loss? Explain.Describe key points (with clear justification) that you would use to encourage a cohort of farmers and a cohort of employers of several electricity distribution companies to join an appropriate health insurance scheme.As a result of the COVID19 pandemic, the Government will be opening a pre-school in Back-A- Town area, and subsidizing the cost. The reason for this is because the government is of the opinion that pre-school education is: * a.Underpriced b.Overproduced c.Under-produced d.Over-produced