MICROECONOMICS
MICROECONOMICS
11th Edition
ISBN: 9781266686764
Author: Colander
Publisher: MCG
Question
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Chapter 3, Problem 1QAP

(a)

To determine

Problems relating with government intervention.

(b)

To determine

Further effect of central planner’s interference on family choices.

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While serving as Chief Economist for the World Bank, the Neoclassical Economist, Lawrence Summers, argued that "the World Bank should be encouraging MORE migration of the dirty industries to the LDCs (Less Developed Countries). What was the reasoning behind his argument? The value of a human life should be based upon a person's income. Therefore, the cost of sickness and death caused by pollution would be lowest in countries with the lowest wages. LDCs have less political power to resist polluting industries. This would create employment in the LDCs, thereby raising living standards. While serving as Chief Economist for the World Bank, the Neoclassical Economist, Lawrence Summers, argued that "the World Bank should be encouraging MORE migration of the dirty industries to the LDCs (Less Developed Countries). What was the reasoning behind his argument? The value of a human life should be based upon a person's income. Therefore, the cost of sickness and death caused by pollution would be…
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