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| If there were no government, the free market would |
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Definition
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| A free market usually works well for consumers because of |
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Definition
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| A free market usually generages two kinds of efficiency |
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Definition
| productive and allocative |
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| A subsidy to the producers of a good shifts |
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Definition
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| Assume there is no externality. A tax on a good results in |
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Definition
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Term
| It is hard to ________ someone from benefiting froma public good like national defense; to prevent __________, government should ______. |
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Definition
| exclude; free-riding; levy a tax |
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| Some people can't get health insurance becuase of their |
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Definition
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Term
| Refer to figure 2.2. Society gains by reducing an emission whenever MAC is less than __________ and a firm gains by reducing an emission whenever MAC is less than _________. |
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Definition
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Term
| Refer to Figure 2.2. Government should set T = ____; then total emissions would be _______. |
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Definition
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Term
| The main purpose of taxing pollution is to |
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Definition
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Term
| If a tax is levied, is cost and emissions certain or uncertain? |
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Definition
| Cost is certain, emissions are uncertain |
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Term
| If permits are sold, are emissions and cost certain or uncertain? |
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Definition
| Emissions are certain, but cost is uncertain. |
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Term
| Selling versus giving permits: firms want ______; taxpayers should want _____. |
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Definition
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Term
| Economists intend pollution taxes to be revenue _____. |
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Definition
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Term
| What are the two properties of a public good? |
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Definition
| Nonexcludability; nonrivalry |
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Term
| Some citizens would not contribute voluntarily to finance a _______ good because they are _____. |
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Definition
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Term
| The standard approach to the free-rider problem is |
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Definition
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Term
| Who should produce a public good? |
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Definition
| Sometimes government, sometimes private firms |
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Term
| Refer to Figure 3.1. The socially optimal wall thickness is _____feet. |
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Definition
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Term
| Refer to Figure 3.1. The reason for summing the MBs is that protection from the wall is __________. |
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Definition
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Term
| "I'll vote for your highest priority if you vote for mine." This is called _______. |
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Definition
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Term
| The optimal scale of a project occurs where the ______ equals the ______. |
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Definition
| marginal social benefit; marginal social cost |
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Term
| Economists find it useful for cost-benefit analysis to have a dollar estimate for |
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Definition
| a VSL - value of a statistical life. |
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Term
| In cost-benefit analysis, economists try to put a dollar value on |
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Definition
| all benefits and all costs |
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Term
| A mistake sometimes made in cost-benefit analysis is counting job _____ as a ______. |
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Definition
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Term
| Cost-benefit analysis applies to |
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Definition
| government, business firms, and individuals |
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Term
| A collective workers support retirees system is implemented by ________ using ________. |
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Definition
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Term
| A collective workers support retirees system can implement ________. |
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Definition
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Term
| Under a defined-________ plan, a worker is promised a retirement benefit that is linked to that worker's wage history. |
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Definition
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Term
| An _________ is paid monthly for as long as the retiree lives. |
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Definition
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Term
| In a competitive insurance market, an insurer who charges a premium that varies directly with income will attract _______ to enroll. |
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Definition
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Term
| In a competitive insurance market, each person will be charged a premium equal to her |
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Definition
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Term
| When patients have 100% insurnace they order more medical care. Insurers call this _____ and economists call it _______. |
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Definition
| moral hazard; price responsiveness |
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Term
| With adverse selection, each time an insurer raises the premium, those who decide to ______ have a _______ cost than the insurer anticipated. |
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Definition
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Term
| Under catastrophic insurance, the household has ______ to consider the ______ of ordinary medical care. |
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Definition
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Term
| Refer to Figure 6.1. When 67% insurance is introduced, the demand curve shifts from |
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Definition
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Term
| Refer to Figure 6.1. When 67% insurance is introduced, the price charged by medical providers _____ from _____ to ______. |
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Definition
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Term
| Undewr fee for service, doctors have a financial incentive to do ______; under capitation, doctors have a financial incentive to do _______. |
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Definition
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Term
| _______ try to regulate medical prices and the use of medical services. |
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Definition
| Both governments and private insurers |
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Term
| Without government insurance for retirees, the typcial individual retiree would be charged a premium equal to |
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Definition
| his own expected medical cost |
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