1. Why do economists oppose attempts to control prices? Why does the government attempt to control prices anyway in a number of markets?
2. Does a binding pricing ceiling cause a shortage or a surplus? Does a non-binding price floor cause a shortage or surplus? Provide an example to support your example for each of the problems above.
3. Does cost-benefit analysis apply to public goods only? If yes, why? If not, name situations in which economists would use cost-benefit analysis.
4. Many cities have noise ordinances that impose especially harsh fines and penalties for early morning and late evening disturbances. Explain why these ordinances exist.
5. Answer Only
Indicate whether the following activities create a positive or negative externality:
a. Late-night road construction begins on a new bridge. As a consequence, traffic is rerouted past your house while the construction takes place.
b. An excavating company pollutes a local stream with acid rock.
c. A homeowner whose property backs up on a city park enjoys the sound of kids playing basketball.
d. A student uses her cell phone discreetly during class.
You and your friends volunteer to plant wild flowers along the local highway.
Answer
As per HomeworkLib policy i have answered first question
why do most economists oppose attempts to control prices?
because it will create deadweight loss in the market as well as create surplus or shortage.
why does the government attempt to control prices anyway, in a number of markets?
Because to prevent consumer or producer from the losses.
1. Why do economists oppose attempts to control prices? Why does the government attempt to control...
Why do most economists oppose attempts to control prices? Why does the government attempt to control prices anyway in a number of markets?
Worksheet 3 Macroeconomics Ch. 5 Market Failures 1. Externalities. A study finds that leaf blowers make too much noise, so the government imposes a $10 tax on the same of every unit to correct for the social cost of the noise pollution. The tax completely internalizes the externality. Before the corrective tax, Blown Away Manufacturing regularly sold blowers for $100. After the tax is in place, the consumer price for leaf blowers is $105. a. Describe the impact of the...
Chapter overview 1. Reasons for international trade Resources reasons Economic reasons Other reasons 2. Difference between international trade and domestic trade More complex context More difficult and risky Higher management skills required 3. Basic concept s relating to international trade Visible trade & invisible trade Favorable trade & unfavorable trade General trade system & special trade system Volume of international trade & quantum of international trade Commodity composition of international trade Geographical composition of international trade Degree / ratio of...