Please try to explain why under certain circumstances, government interventions are better than doing nothing? You need to answer this question step by step like the following: (1) Why are we living in a second-best real world? What are the differences between the second-best reality and first-best world? (2) Why do we say that in the second-best reality, free trade may result in deadweight losses? (3) Please use a diagram to explain when does government should protect domestic production or employment? (4) Please further explain whether tariff is the best policy to protect domestic production and employment? If mot, what is the better policy? And why is there better policy than tariff?

Please try to explain why under certain circumstances, government interventions are better than doing nothing? You need to answer this question step by step like the following: (1) Why are we living in a second-best real world? What are the differences between the second-best reality and first-best world? (2) Why do we say that in the second-best reality, free trade may result in deadweight losses? (3) Please use a diagram to explain when does government should protect domestic production or employment? (4) Please further explain whether tariff is the best policy to protect domestic production and employment? If mot, what is the better policy? And why is there better policy than tariff?

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter6: The Economics Of Political Action

Section: Chapter Questions

Problem 10CQ

See similar textbooks

Similar questions

Imagine a society that produces military goods and consumer goods, which we’ll call “guns” and “butter.” Draw a production possibilities frontier for guns and butter. Explain why it most likely has a bowed out shape. Show a point that is impossible for the economy to achieve. Show a point that is feasible but inefficient. Imagine that the society has two political parties, called the Hawks (who want a strong military) and the Doves (who want a smaller military). Show a point on your production possibilities frontier that the Hawks might choose and a point the Doves might choose. Imagine that an aggressive neighboring country reduces the size of its military. As a result, both the Hawks and the Doves reduce their desired production of guns by the same amount. Which party would get the bigger “peace dividend,” measured by the increase in butter production? Explain.
In a market economy, what is the central coordinating mechanism? How does a market economy solve the what, how, and for whom to produce problems? Why does an economy’s strength ultimately reside in its people?
Based upon those notions of self-interest and public interest and the bringing of both into harmony, according to Adam Smith, how would a market economy accomplish that harmony about which he describes? What is government's place in that market economy? What about incentives as opposed to free offerings? What about trade?
Imagine a society that produces military goods and consumer goods, which we’ll call “guns” and “butter.” Draw a production possibilities frontier for guns and butter. Using the concept of opportunity cost, explain why it most likely has a bowed-out shape. Show a point that is impossible for the economy to achieve. Show a point that is feasible but inefficient. Imagine that the society has two political parties, called the Hawks (who want a strong military) and the Doves (who want A smaller military). Show a point on your production possibilities frontier that the Hawks might choose and a point the Doves might choose. Imagine that an aggressive neighboring country reduces the size of its military. As a result, both the Hawks and the Doves reduce their desired production of guns by the same amount. Which party would get the bigger “peace dividend,” measured by the increase in butter production? Explain.
Explain briefly why the people and firms operating within a command economy would in all cases be less free than the people and firms operating within a capitalist economy.
In a market system, provide an example for when government can enhance or harm any of the processes involved in terms of what should be produced, how it should be produced, and for whom.
What is Production Efficiency and Inefficiency in economics? Explain with the help of a diagram. When does a country have a comparative advantage over producing a good? Explain with examples.
Explain whether each of the following statements is positive or normative: i.Embargoes and quotas should reduce general economic welfare
I need the questions below answered; I took some off. Suppose that the nation of Costa Rica produces Coffee and Bananas. Below are the possible combinations of Coffee and Bananas that Costa Rica can produce. Combination Bananas metric tons (X axis) Coffee metric tons (Y axis) A 20,000 0 B 18,000 11,000 C 14,000 20,000 D 8,000 27,000 E 0 30,000 What is the opportunity cost (amount & item) of increasing production from 18,000 tons of bananas to 20,000 tons of bananas ? _________________ What is happening to the opportunity cost as Costa Rica produces more bananas? ______________________ What is the opportunity cost (amount & item) of the first 11,000 tons of coffee produced? ______________________ What is the opportunity cost (amount & item) of increasing production from 11,000 tons of coffee to 20,000 tons of coffee ? ________________ What is the opportunity cost (amount & item )of increasing production from…
If economic laws are applicable in real world?
What are some examples of a command economy? Market Economy?
To what extent are free markets morally justified? In your answer, you may want to be clear about the difference between the welfare-based and freedom-based arguments in support of free markets.