Download the App!
Get 24/7 study help with the Numerade app for iOS and Android! Enter your email for an invite.
Question
Answered step-by-step
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 pricesb. providing some poor people with vouchers that can be used to buy foodc. prohibiting smoking in public placesd. breaking up Standard Oil (which once owned 90 percent of all oil refineries) into several smallercompaniese. imposing higher personal income tax rates on people with higher incomesf. instituting laws against driving while intoxicated
Video Answer
Solved by verified expert
This problem has been solved!
Try Numerade free for 7 days
Like
Report
Official textbook answer
Video by Yi Chun Lin
Numerade Educator
This textbook answer is only visible when subscribed! Please subscribe to view the answer
No Related Courses
Chapter 1
Ten Principles of Economics
How Markets Work
Introduction
Marvin S.
August 31, 2021
Is a efficiency or equality? It says one in the text, and one in the slide
Anshu P.
June 19, 2021
Driving while intoxicated createsan externality Correct because of the increased likelihood of accidents by drunk drivers.
0:00
Explain whether each of th…
07:19
Discuss the efficiency and…
06:17
01:22
The government is involved…
02:48
How do each of these examp…
01:48
Discuss each of the follow…
in this problem, we have to explain where the hauling government activities is motivated by concern about equality or concern about efficiency. In the case of deficiencies, we have to discuss the type of market fairly were involved. I'm so here. I'm really gonna explain the case of efficiency and see what are the market failures it mind of Involved s o I'm gonna briefly go through a is regulating cable TV prices. So this is going to be a own A couple activity won't invaded by a concerned about equality. Because if we do not regulate TV prices is have a big, very high so poor people can never before cable to be, which is bad for equality. B. Of course, you're providing food voucher to the poor. So it's definitely about equality. See pro papering smoking in public places weaken a compared this law against the question F which is instituted loss against driving while intoxicated. So C and F Thies too are both laws that bane tobacco and on long that banned alcohol. So these two our concern about efficiency because their government made you think that when people drink over when they smoke their health condition decreasing something by not being attacked for doctor who when they're working or engaging in any kind of social activities. So from this point ofthe concern is about efficiency. But what causes market failure is that if we banned tobacco in alcohol, tobacco and alcohol venders, they're not going to earn enough profits to support their business. So in tobacco market or in wine market alcohol market, the year might be except Kishan supply due to insufficient remain, so market failures might happen in those markets. Okay, so and Dean ah, breaking up standard oil into several smaller companies. So this is a typical case of breaking up Madonna because then you're always a very huge off oil company. And in is a meth operation, which means that on ly this company can sell oil. So maybe it is not that efficient, but because it is the only source of oil. People have no other options, but to Baio Baio from them. So they're my person corruption in this company or anything that is not official. So breaking this big huge company into several smaller companies isn't backed off increasing efficiency, and it also provide other people with working opportunities in the smaller companies, but the type of market feller that it involves my beater. Maybe running that oil company by itself is better because it already set up the pipeline that already set up the from the stream yushin area. So breaking this whole system off may sometimes be costly, and it is also costly for several smaller companies to rebuild the pipe. Wayne and the Green build a distribution system. Which one. B? Another market failure in this problem. And he is about imposing higher personal income tax on the rich, which is not actually trying to help your poor. So it's about equality, so in conclusion on we, C and D and F r about efficiency.
View More Answers From This Book
Find Another Textbook
02:50
'An ice-cream parlour in Rome operates in a perfectly competitive marke…
03:45
'Suppose the (inverse) daily demand for oil is given by P = 130 Q, wher…
02:16
'The makers of Expresso know that the prices of other products might de…
06:48
'Scrooge McDuck charges Donald Duck a nominal interest rate of 20% on a…
02:59
"A small firm burning compost to produce energy opens next to an urban …
05:20
'Which of the following is a limitation of the unemployment rate? Oa It…
05:27
"Consider that Britain is trying to maintain a fixed exchange rate with…
00:29
"In country's balance of payments, which of the following items wi…
02:47
'Suppose that the demand for a monopolists product is estimated to be Q…
00:52
'The market demand curve for a product is Dlp) = 9 = 411 0.2p. The mark…
