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salmonraccoon110Lv1

18 Aug 2020

Which of the following is a key difference between the economic activities of the government and those of private firms?

a. Private firms face the constraint of scarcity; the government does not.
b. Government focuses primarily on equity; private firms focus only on efficiency.
c. Private economic activities create externalities; government activities do not.
d. Government has the legal right to force people to do things; private firms do not

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Sonia DhawanLv10

25 Sep 2020

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Related questions

44. The endangered species act has:

a. had no impact on the number of endangered or other economic activities

b.causeed a loss of economic activities on some private land

c. further reduced the number of endangered species

d. saved all endangered species without affecting anyone

42. Which type of property would experience pollution?

a. common property

b. private property

c. corporate property

d. property help in partnership

41. One difficulty in using voluntary transactions to internalize externalities is that:

a. people usually don't understand what real opportunity cost is and that they face

b. people are motivated by self-interest and are often unwilling to engage in a transaction that might make another person better off

c.transactions costs of coming to an agreement can be very large when numerous people are involved

d.the government will not usually enforce contracts of this type

37. If pollutants from smokestacks in a city such as Newark cause people to paint their homes and cars more frequently, this implies:

a. external costs on home and car owners

b. internal cost to home and car owners

c. external benefits to the home and car owners

d. none of the above

35. If a good is produced by firms that incur all private and external costs, the price consumers pay:

a. will be too high because the consumers end up paying all of the costs instead of the firm

b. will be too low

c. will be efficient since it includes all social costs

d. will be the correct but inefficient

redbadger988

. Vouchers to Pay Private School
Tuition
Two conditions that justify government intervention in a market are the presence of external benefits and equity concerns. Both of these issues are present in the case of primary and secondary education in the United States. Think about what education without government education would look like. In the absence of government intervention, all primary and secondary education in the US would be private. Public school districts would not exist. Parents would need to pay private firms (schools) to educate their children.

External benefits

If all education were private, itâs likely that people would buy too little education, from societyâs point of view. External benefits are one reason. When a child is educated, he or she benefits and we expect his or her parents to take those benefits into account when they purchase education. But there are additional benefits to society which parents may ignore. As people become more educated, they are less likely to be unemployed or be criminals and are more likely to volunteer and vote. The presence of these external benefits is an example in support for the government getting involved in education.

Equity

Many families in the United States have low incomes. Among all children in first through twelfth grades in 2001, 46% were from families with incomes below $40,000. Since the cost of private education would be an important share of these familiesâ incomes, most Americans would be concerned about the fairness of relying on markets to decide how much education children receive. Current spending by these families on private education provides some support for this concern. Of all children in private school in 2001, only 25% were from families with incomes below $40,000. Therefore, equity concerns are another example in support for government getting involved in education.

Providing vs. producing education

Most economists think external benefits and equity concerns justify government intervention in education. But it is important to distinguish between government production of education and other forms of government intervention. At the level of elementary and secondary education, K- 12 education, government intervention today mostly means production of education by local school districts. To benefit, children must attend public schools. But this is not the only form intervention could take.
There are other markets where government intervention takes the form of subsidizing peopleâs access to productsâthink of financial aid to college students, for example. Many people in the US think that government should move from producing education to subsidizing access.

One form that subsidy could take is government providing vouchers to parents. Parents would use the voucher to help pay for their childâs education in a private school. After it receives the voucher, the school would turn it in and be paid by a local or state government.

Today there is a lively debate between people who think K-12 education should be delivered publicly and people who think quality and efficiency would be higher if government provided vouchers and the education was delivered by private schools. Some of these quality and efficiency arguments can be based on material we covered this week. Price competition between private schools will pressure each one to produce efficiently. Competition for students will lead private schools to offer programs of interest to parents and their children.

Answer the questions below and make use of the sources supplied. Be sure to cite you sources in your answers.

1. Explain whether a potential exit by students with vouchers will lead to the improvement of public schools. 2. Discuss whether the implementation of vouchers will lead the best students to leave public school, which could lead to a decline in education for the students left behind in the public schools. 3. Consider what might happen to the students who use vouchers to leave public schools in order to attend private schools. How might their academic performance change as a result of switching? 4. Finally, think about the impact of a voucher system on the students in an urban setting. Describe whether all families would have an equal opportunity to access education.

Your final product will be a paper that: ? Addresses each of the four questions above in total. ? Is APA formatted. ? The body is to be 2 pages minimum.

The requirements for your assignment are: 1. Answer each question fully 2. Define the overall subject of each question. 3. Cite at least three (3) resources from this weekâs materials.

Question 1

An externality

		enhances market efficiency.
		is a private cost or benefit that results from the production or consumption of a good or service that is external to a market.
		is a benefit or cost that affects someone who is not directly involved in the production or consumption of a good or service.
		refers to production or consumption that occurs outdoors.

5 points

Question 2

Externalities can be produced by:

		the high price of goods and services
		individuals; firms
		market prices; market incomes
		oceans; streams

5 points

Question 3

When an external cost exists that is NOT taken into account in the production of a product,

		the level of output is too high, and the supply curve should shift to the left to account for the externality.
		the price of the product is too high, and production should be expanded to lower the price.
		the level of output is optimal, and there should be no change in the supply curve.
		the level of output is too low, and the supply curve should shift to the right to account for the externality.

5 points

Question 4

Which of the following is correct?

		MSC = MPC - MD
		MPC = MSC + MD
		MSC = MPC + MD
		MD = MSC + MPC

5 points

Question 5

If external costs (costs of cleaning up) are included and added to a firm's private costs, then

		the demand curve will shift to the left.
		the supply curve will shift to the right.
		the demand curve will shift to the right
		the supply curve will shift to the left.

5 points

Question 6

The Coase Theorem states that

		government intervention is always needed if externalities are present.
		assigning property rights is the only thing the government should do in a market economy.
		if transaction costs are low, private bargaining will result in an efficient solution to the problem of externalities.
		a free-market equilibrium is the best solution to address externalities.

5 points

Question 7

Buffalo in the United States almost became extinct while cattle, an animal that provides similar products, never have been close to extinction. The difference is due to

		the use of private property rights on cattle and common property rights on buffalo.
		the greater marginal value of a head of cattle relative to buffalo, leading to over-hunting of buffalo.
		cattle existing in Europe also while buffalo were specific to North America.
		the greater marginal value of a buffalo relative to a steer, leading to the overharvesting of buffalo.

5 points

Question 8

In theory, the Emissions Fee would

		cause firms to generate less pollution than their allowed limits.
		raise the production costs of all firms.
		cause firms to generate more pollution than their allowed limits.
		lower the production costs of all firms.