What are some of the forms that central planning has taken in developing nations today?
What will be an ideal response?
In some countries central planning has replaced market-based outcomes with direct, administratively determined controls over such economic variables as prices, output, and employment. In others it has amounted to no more than formulation of 5- or 10-year goals as rough blueprints for the nation's future.
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Suppose that recycling rubber for sneakers creates an external benefit of $2.00 per ton of rubber. There are no external costs. The efficient amount of rubber will be recycled when the government creates a
A) subsidy of more than $2.00 per ton of rubber. B) subsidy of $2.00 per ton of rubber. C) tax of more than $2.00 per ton of rubber. D) tax of $2.00 per ton of rubber.
Which of the following is an example of an intermediate good?
a. Sugar bought by a bakery b. Sugar bought by a family c. Furniture bought by a family d. Burgers bought at a restaurant e. Medicines bought at a pharmacy
Your boss, the mayor of a city, thought that she'd come up with a great way to raise city revenue: increase the tax on gasoline in the city! However, she discovered that the city was actually receiving less tax revenue after the gas tax increase than before. Incensed, she declared that the economic policy prescription of taxing goods with inelastic demand must be flawed. Comment on her conclusion.
What will be an ideal response?
Refer to the table below, which shows the ranked preferences of voters for three alternative projects, with "1" being the top preference. This situation illustrates the voting inconsistency where a majority of voters prefer the:
A. Stadium over the park, the park over the jail, and the jail over the stadium
B. Park and jail over the stadium, and the jail over the park
C. Stadium over the jail, the jail over the park, and the park over the stadium
D. Stadium and jail over the park, and the park over the jail