Chapter 5, Government's Role and Government Failure Video Solutions, Economics: Principles, Problems, and Policies

Problem 1

Select all of the following that are true. To an economist, a coercive government can be useful in order to:
a. Reallocate resources in order to improve efficiency.
b. Fight negative externalities.
c. Ensure low gasoline prices.
d. Provide a low-risk economic environment for individuals and firms.

Oluwadamilola Ameobi

Numerade Educator

02:00

Problem 2

To an economist, a government program is too big if an analysis of that program finds that $\mathrm{MB}$ _____ $\mathrm{MC}$.
a. Is greater than.
b. Is less than.
c. Is equal to.
d. Is less than twice as large as.
e. Is more than twice as large as.

Oluwadamilola Ameobi

Numerade Educator

01:57

Problem 3

Tammy Hall is the mayor of a large U.S. city. She has just established the Office of Window Safety. Because windows sometimes break and spray glass shards, every window in the city will now have to pass an annual safety inspection. Property owners must pay the S5-per-window cost-and by the way, Tammy has made her nephew the new head of the Office of Window Safety. This new policy is an example of:
a. Political corruption.
b. Earmarks.
c. Rent seeking.
d. Adverse selection.

Oluwadamilola Ameobi

Numerade Educator

03:13

Problem 4

A few hundred U.S. sugar makers lobby the U.S. government each year to make sure that the government taxes imported sugar at a high rate. They do so because the policy drives up the domestic price of sugar and increases their profits. It is estimated that the policy benefits U.S. sugar producers by about 1 billion dollars per year while costing U.S. consumers upwards of
2 billion dollars per year. Which of the following concepts apply to the U.S. sugar tax?
a. Political corruption.
b. Rent-seeking behavior.
c. The collective-action problem.
d. The special-interest effect.

Niamat Khuda

Numerade Educator

13:03

Problem 5

_____ occur when politicians commit to making a series of future expenditures without simultaneously committing to collect enough tax revenues to pay for those expenditures.
a. Budget deficits
b. Debt crises
c. Loan guarantees
d. Unfunded liabilities

Md.Daniyal Arshad

Numerade Educator