Which of the following is a cost associated with government intervention in an economic system?
Given that there are costs involved with government intervention in an economy, governments still choose to intervene in markets to ____________.
How would this explain the thriving black market for cigarettes in New York?
It is more profitable to sell cigarettes on the black market in New York.
How would you depict the trade-off between equity and efficiency on a graph?
Inequality on one axis and social surplus on the other with a positively-sloped function.
A government would want to be on this curve where ___________.
there is no correct answer to this question, as the answer depends on a government's value judgments.
What is the equity implication of imposing an estate tax?
It is fair because it reduces inequality.
What is the efficiency implication of imposing an estate tax?
It is inefficient because it reduces investment.
Paternalism is the view that ___________.
people do not always know what is best for them, and the government should encourage them to make the right choices.
Consumer sovereignty suggests that ____________.
government should not interfere with consumer choices.
Why are there two different views on the effect of taxation on labor supply in the United States?
All of the above.