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Economics

David C. Colander

Chapter 23

Microeconomic Policy, Economic Reasoning, and Beyond - all with Video Answers

Educators

Chapter Questions

05:59

Problem 1

Could anyone object to a Pareto optimal policy? Why? $(L O 23-1)$

Crystal Wang
Crystal Wang
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05:59

Problem 2

Would it be wrong for economists to propose only Pareto optimal policies? $(L O 23-1)$

Crystal Wang
Crystal Wang
Numerade Educator
00:50

Problem 3

Would all economists oppose price controls? Why or why not? $(L O 23-1)$

Kaylee Mcclellan
Kaylee Mcclellan
Numerade Educator
04:16

Problem 4

In the early $1990 \mathrm{~s}$, the 14 - to 17 -year-old population fell because of low birth rates in the mid-1970s. Simultaneously the combined decisions of aging baby boomers to have kids resulted in an increase in the number of babies and hence in an increase in the number of parents needing baby-sitters. What effect will these two events likely have on: $(L O 23-2)$
a. The number of times parents go out without their children?
b. The price of baby-sitters?
c. The average age of baby-sitters?
d. Should government require a minimum wage and age of baby-sitters?

Oluwadamilola Ameobi
Oluwadamilola Ameobi
Numerade Educator
03:09

Problem 5

Should the buying and selling of body organs be allowed Why or why not? $(L O 23-2)$

Ali Crampton
Ali Crampton
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19:58

Problem 6

In the 1970 s legislators had difficulty getting laws passed requiring people to wear seat belts. Now not only do most people wear seat belts, but many cars have air bags too. Do people value their lives more today? (LO23-2)

Harsh Gadhiya
Harsh Gadhiya
Numerade Educator
02:05

Problem 7

Economist Steven D. Levitt estimated that, on average, for each additional criminal locked up in the United States, 15 crimes are eliminated. In addition, although it costs about $\$ 30,000$ a year to keep a prisoner incarcerated, the average prisoner would have caused $\$ 53,900$ worth of damage tosociety per year if free. If this estimate is correct, does it make economic sense to build more prisons? (LO23-2)

Jennifer Stoner
Jennifer Stoner
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Problem 8

If one uses a willingness-to-pay measure in which life is valued at what people are willing to pay to avoid risks that might lead to death, the value of a U.S. citizen's life is $\$ 2.6$ million, a Swede's life is worth $\$ 1.2$ million, and a Portuguese's life is worth $\$ 20,000 . \quad(L O 23-2)$
a. What policy implications does this value schedule have?
b. Say you operate an airline. Should you spend more on safety precautions in the United States than you do in Portugal?

Rashmi Sinha
Rashmi Sinha
Numerade Educator
00:03

Problem 9

In "Valuing Reduced Risks to Children: The Case of Bicycle Safety Helmets," economists Robin $\mathrm{R}$. Jenkins, Nicole Owens, and Lanelle Bembenek Wiggins estimate the value of the lives of children by using parents' willingness to purchase bicycle helmets. Wearing a helmet reduces the probability of death from bicycling by .0000041 . The annualized cost of a helmet is $\$ 6.51$. $(L O 23-2)$
a. What economic concept is their study based on?
b. Assuming helmets are worn 100 percent of the time, what is the value of life parents place on a child as revealed by their purchase of a bicycle helmet?
c. What happens to the value-of-life estimate if parents expect their children to wear the helmets less than 100 percent of the time?

Sheryl Ezze
Sheryl Ezze
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02:16

Problem 10

What are three ways in which a well-functioning market might result in undesirable results? $(L O 23-3)$

Noor Almesad
Noor Almesad
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02:10

Problem 11

Until recently, China had a strict one-child-per-family policy. For cultural reasons, families favor boys and there are now many more male than female children born in China. How is this likely to affect who pays the cost of dates in China in 15 to 20 years? Explain. $(L O 23-3)$

Rashmi Sinha
Rashmi Sinha
Numerade Educator
09:43

Problem 12

As organ transplants become more successful, scientists are working on ways to transplant animal organs to humans. Pigs are the odds-on favorites as "donors" since their organs are about the same size as human organs. $(L O 23-3)$
a. What would the development of such organ farms likely do to the price of pigs?
b. If you were an economic adviser to the government, would you say that such a development would be Pareto optimal (for humans)?
c. Currently, there is a black market in human organs. What would this development likely do to that market?

Sana Riaz
Sana Riaz
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01:58

Problem 13

Why are economists' views of politicians cynical? (LO23-4)

Natalie Britton
Natalie Britton
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02:39

Problem 14

Anthony Zielinski, a former member of the Milwaukee Board of Supervisors, proposed that the county government sell the organs of dead welfare recipients to help pay off the welfare recipients" welfare costs and burial expenses. What was the likely effect of that proposal? Why? (LO23-4)

Ali Crampton
Ali Crampton
Numerade Educator
00:55

Problem 15

What is the basis for the opinions of public choice economists about government's ability to correct $\begin{array}{ll}\text { market failures? } & (L O 23-4)\end{array}$

Kaylee Mcclellan
Kaylee Mcclellan
Numerade Educator