Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN: 9781305971493
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 1, Problem 7PA
To determine
Situations that explain efficiency and equity.
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Explain whether each of the following government activities is motivated by a concern about
equality or a concern about efficiency. In the
case of efficiency, discuss the type of market
failure involved.
a. regulating cable TV prices
b. providing some poor people with vouchers
that can be used to buy food
c. prohibiting smoking in public places
d. breaking up Standard Oil (which once
owned 90 percent of all oil refineries) into
several smaller companies
e. imposing higher personal income tax rates
on people with higher incomes
f. instituting laws against driving while
intoxicated
Analyze whether each of the following government activities is motivated by a concern
about equality or a concern about efficiency. In the case of efficiency, discuss the type of
market failure involved.
a. Regulating cable TV prices
b. Prohibiting smoking in public places
c. Breaking up Standard Oil Cartels in the world.
d. Imposing higher personal income tax rates on people with higher incomes
e. Instituting laws against driving while intoxicated
Decide whether each of the following descriptions most closely corresponds to being part of a command system, a market system, or a laissez-faire system. a. A woman who wants to start a flower shop finds she cannot do so unless the central government has already decided to allow a flower shop in her area. b. Shops stock and sell the goods their customers want but the government levies a sales tax on each transaction in order to fund elementary schools, public libraries, and welfare programs for the poor. c. The only taxes levied by the government are to pay for national defense, law enforcement, and a legal system designed to enforce contracts between private citizens.
Chapter 1 Solutions
Principles of Microeconomics (MindTap Course List)
Ch. 1.1 - Prob. 1QQCh. 1.2 - Prob. 2QQCh. 1.3 - Prob. 3QQCh. 1 - Prob. 1CQQCh. 1 - Prob. 2CQQCh. 1 - Prob. 3CQQCh. 1 - Prob. 4CQQCh. 1 - Prob. 5CQQCh. 1 - Prob. 6CQQCh. 1 - Prob. 1QR
Ch. 1 - Prob. 2QRCh. 1 - Prob. 3QRCh. 1 - Prob. 4QRCh. 1 - Prob. 5QRCh. 1 - Prob. 6QRCh. 1 - Prob. 7QRCh. 1 - Prob. 8QRCh. 1 - Prob. 9QRCh. 1 - Prob. 10QRCh. 1 - Prob. 1PACh. 1 - Prob. 2PACh. 1 - Prob. 3PACh. 1 - Prob. 4PACh. 1 - Prob. 5PACh. 1 - Prob. 6PACh. 1 - Prob. 7PACh. 1 - Prob. 8PACh. 1 - Prob. 9PACh. 1 - Prob. 10PACh. 1 - Prob. 11PA
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