The consequences of government intervention Question 1 options: are generally as planned by policy makers. often involve unintended consequences. fall on low income individuals. fall on middle income individuals. serve to increase efficiency in markets. serve to increase equity of distribution a mixture of answers above
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Because people respond to incentives, a. policymakers can alter outcomes by changing punishments or rewards. b. policies can have unintended consequences. c. society faces a trade-off between efficiency and equality. d. All of the above.
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Discuss the efficiency and equity implications of each of the following policies. How would you go about balancing the concerns of equity and efficiency in these areas? a. The government pays the full tuition for every college student to study whatever subject he or she wishes. b. When people lose their jobs, the government provides unemployment benefits until they find new ones.
When markets fail, public policy can a. do nothing to improve the situation. b. potentially remedy the problem and increase economic efficiency. c. always remedy the problem and increase economic efficiency. d. in theory, remedy the problem, but in practice, public policy has proven to be ineffective.
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