Microeconomics Chapter 23 Quiz

The main reason the usefulness of Pareto optimal policies is limited as a policy guide is that:

What do economists mean when they say a situation is Pareto optimal?

Mainstream economists focus on:

A proposal to build a dam on a wild river may look like a good idea from the cost/benefit study done by the Army Corps of Engineers, but an analysis done by the Sierra Club might suggest that the dam would be a complete waste of money. When different groups give us radically different cost/benefit results:

The cost of repositioning an automobile gas tank for greater safety is $11 per vehicle for 12.5 million vehicles. The automobile company places a value on life of $500,000. To justify redesigning the location of the gas tank, the number of deaths expected to occur if the gas tank location is not redesigned would have to be at least:

Which of the following is one of the reasons economists sometimes differ in their views on social policy?

The U.S. government does not allow toggle switches for power windows in automobiles. The National Highway Traffic Safety Administration found that the regulation will save about two children every three years and have negligible costs because the industry will have plenty of time to incorporate new switches into future vehicles. Evaluating this rule in terms of costs and benefits, an economist most likely would conclude that:

What is one reason the United States produces luxury cars such as the Chevy Corvette but still does not provide health care for all individuals?

Critics of advertising sometimes argue that the overall effect of advertising is to make people believe that possessing lots of material goods is the only route to happiness. These critics also believe that this is a misleading view of happiness. Hence, these critics:

Which of the following is not an example of a failure of market outcome?

In prisoner-of-war camps during World War II, the prisoners received identical packets of food and supplies. Nonetheless, prisoners traded items from those identical packets because their tastes differed. The initial distribution of packets was:

Two economists are debating whether to remove a tariff on luxury vehicles. They agree that consumers will benefit by $5 billion and that the harm done to domestic businesses and workers will be only $4 billion. One argues that these facts make it obvious that the tariff should be removed. The other disagrees. What would be a likely reason for the second economist to disagree?

Which of the following generalizations is derived from the economist's framework?

Most economists agree that the best way to evaluate policy is to:

Policy makers with conservative values usually ask for policy recommendations from:

Sin taxes are most effective when imposed on goods for which:

The long-run market solution to a wage that is so low that workers cannot survive is:

would never be violated in a free market environment.

Failure of market outcomes occurs when:

Which of the following is one of the reasons economists sometimes differ in their views on social policy?