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Earnings and Discrimination
Income Inequality and Poverty
Question #1: In the absence of externalities, the invisible hand of the marketplace
induces people to act in a manner inconsistent with self-interest.
is unable to resolve inherent inefficiencies in the market system.
leads to a market outcome that maximizes total benefit to society.
increases the transactions cost of contracting between parties to an exchange.
Question #2: When dealing with externalities, the market equilibrium can be moved closer to the social optimum by
taxing negative externalities and subsidizing positive externalities.
taxing both positive and negative externalities.
subsidizing both positive and negative externalities.
None of the above, because government has no corrective policy with regards to consumption externalities
Question #3: Employing a lawyer to draft and enforce a private contract between parties wishing to solve an externality problem is known as
a sunk cost
an implicit cost
a transaction cost
an opportunity cost
Question #4: Which of the following policies is government most inclined to use when faced with a positive externality?
Question #5: When a good is said to be 'non excludable', what does that mean?
one person’s use of the good will prevent other people from using it
one person’s use of the good does not reduce another person’s ability to use it
a good which is privately owned
a good, which can be patented
Question #6: When a good is said to be 'non rival', what does that mean?
the consumption of a good by one consumer will prevent others from consuming it
the consumption of a good by one consumer will NOT prevent others from consuming it
other people can enjoy the use of a good when someone consumes it
other people cannot enjoy the use of a good when someone consumes it
Question #7: What is market failure?
when common resources are not well distributed
when the government charges too much tax
when common resources are used excessively
when common resources are privately owned
Question #8: Market Failure happens when:
the government does not pay for the common resources
property rights are not well established
the general public are charged for the common resources
the government did not regulate common resources accordingly
Question #9: Which of these is NOT a reason for above-equilibrium wages?
Minimum wage laws
Membership of a Union
Question #10: Utilitarianism was famously the political philosophy of...
Jeremy Bentham & John Stuart Mills
Richard H. Thaler & Cass R. Sunstein
Question #11: Aiming to maximize the well-being of the worst-off person in society is a tenet of..
Question #12: Which of these is NOT an example of an in-kind transfer..
free school meal
revenue from high income families
free dentist visits
Public Goods and Common Resources Worksheet
Earnings and Discrimination Worksheet
Income Inequality and Poverty Worksheet
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