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 prices b) Providing some poor with vouchers that can be used to buy food. c) Prohibiting smoking in public places
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 prices b) Providing some poor with vouchers that can be used to buy food. c) Prohibiting smoking in public places
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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2. 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 prices
b) Providing some poor with vouchers that can be used to buy food.
c) Prohibiting smoking in public places
d) Breaking up Standard Oil (which once owned 90 percent of all oil refineries) into
several smaller companies.
e) Imposing higher personal income tax rates on people with higher incomes
f) Instituting laws against driving while intoxicated.
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