Chapter 1, Problem 11P

To determine

Government often adopts certain policies in order to promote desired behavior among their citizens. For each of the following polices, determine what the incentive is and what behavior the government wishes to promote. In each case, why do you think that the government might wish to change people’s behavior, rather than allow their actions to be slowly determined by individual choice?

a).A tax of $5 per pack is imposed on cigarettes.

b).The government pays parents $100 when their child is vaccinated for measles.

c).The government pays college students to tutor children from low income families.

d).the government imposes a tax on the amount of air pollution that a company dischargers.

Concept Introduction:

When markets don’t achieve efficiency, gov’t intervention can improve society’s welfare.