Direct shipment of wine to individuals is illegal. Some wineries want the law revoked. They argue that the ability to ship directly to consumers helps small wineries and that shipping bans unfairly protect home-state wineries, raising prices to consumers. Others argue that the bans allow states to collect tax revenues and to keep wine from being sold to minors. What would most economists say about whether this ban should stay or be eliminated?
A. Because there would be people harmed, lifting the ban would not be Pareto optimal. Therefore, eliminating the ban is a bad policy.
B. There are benefits to lifting the ban but also costs, and unless we know these costs and benefits, we cannot decide.
C. Lifting the ban would make taxes less equitable. Therefore, the ban should remain.
D. Economists would argue that competition is good and the ban prevents competition. Therefore, the ban should be lifted.
Answer: B
You might also like to view...
In the ________, each firm treats the output of its competitor as fixed and then decides how much to produce
A) Cournot model B) model of monopolistic competition C) Stackelberg model D) kinked-demand model E) none of the above
Each person in the population can be classified as employed, unemployed, or not in the labor force
a. True b. False Indicate whether the statement is true or false
The basic task of economics is to
What will be an ideal response?
Compare and contrast the short-run aggregate supply (SRAS) curve and the long-run aggregate supply (LRAS) curve. What elements do they have in common? What elements differ between them?
What will be an ideal response?