PRINCIPLES OF MICROECONOMICS (OER)
2nd Edition
ISBN: 9781947172340
Author: Timothy Taylor, Steven A. Greenlaw
Publisher: OpenStax
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Chapter 18, Problem 27P
Say that the government is considering a ban on smoking in restaurants in Tobaccoville. There are 1 million people living there, and each would benefit by
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1. Suppose the government is considering a ban on smoking in restaurants in Tobaccoville. There are 1 million residents in Tobaccoville, and each resident would benefit by $200 from the smoking ban. However, there are two large tobacco companies in Tobaccoville, and the ban would cost each company $5 million.
What are the proposed policy's total costs and total benefits?
Why would the proposed smoking ban likely fail?
2. To ensure safety and efficacy, the Food and Drug Administration regulates the medicines that pharmacies are allowed to sell in the US. Sometimes this means that a company must test a drug for years before receiving FDA approval and reaching the market. We can easily identify the "winners" in this system as those who are protected from unsafe drugs that might otherwise harm them.
Who are the more "anonymous losers" who suffer due to the strict FDA medical regulations?
Is it in the public interest to tax cigarettes? Explain your position using some of the economic concepts or graphs.
Chapter 18 Solutions
PRINCIPLES OF MICROECONOMICS (OER)
Ch. 18 - Based on the theory of rational ignorance, what...Ch. 18 - What is the cost of voting in an election?Ch. 18 - What is the main factor preventing a large...Ch. 18 - Why might legislators vote to impose a tariff an...Ch. 18 - True or false: Majority rule can fail to produce a...Ch. 18 - Anastasia, Emma, and Greta are deciding what to do...Ch. 18 - Suppose there is an election for Soft Drink...Ch. 18 - How does rational ignorance discourage voting?Ch. 18 - How can a small special interest group win in a...Ch. 18 - How can pork-barrel spending occur in a situation...
Ch. 18 - Why do legislators vote for spending projects in...Ch. 18 - Why does a voting cycle make it impossible to...Ch. 18 - How does a government agency raise revenue...Ch. 18 - What are some reasons people might find acquiring...Ch. 18 - What are some possible ways to encourage voter...Ch. 18 - Given that rational ignorance discourages some...Ch. 18 - When Microsoft was founded, the company devoted...Ch. 18 - Representatives of competing firms often comprise...Ch. 18 - Special interests do not oppose regulations in all...Ch. 18 - To ensure safety and efficacy, the Food and Drug...Ch. 18 - How is it possible to bear a cost without...Ch. 18 - Is pork-barrel spending always a bad thing? Can...Ch. 18 - The United States currently uses a voting system...Ch. 18 - What are some alternatives to a first past the...Ch. 18 - AT10 million dollar. Lobbying Congress to block...Ch. 18 - Occupy Wall Street was a national (and later...Ch. 18 - Say that the government is considering a ban on...
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- Radio stations, tornado sirens, light houses, and street lights are all public goods in that all are nonrivalrous and nonexclusionary. Therefore why does the government provide tornado sirens, street lights and light houses but not radio stations (other than PBS stations)?arrow_forwardHow do public television stations, like PBS, try to overcome the free rider problem?arrow_forwardProvide a subsidy for the vaccination Government produces and operates vaccination centers, where vaccines are provided at no charge. Impose a regulation, requiring the people of the nation to get the vaccination Explain the potential unintended consequences of each one of these polices. Which policy would you enact and why?arrow_forward
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