Questions for Review without Answers
Chapter 18. Markets and the Government II. Microeconomic Policy to Rectify a Lack of Equity.
An Overview
I. Basics
1) Why do economists claim that there is no market failure on factor markets?
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II. The Exploitation of Land and Labour
2) An engineer, a plot of land and a robot have in common that they are factors of production and commodities on factor markets. What else do they have in common? What are the differences between them?
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III. Lack of Equity
3) What is instrumentalism?
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4) What is the UN Human Development Index?
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5) Explain how the quintile method measures inequality.
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6) Do the same for the Gini coefficient.
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7) To which reasons do economists ascribe income inequality?
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8) Explain Okun's bucket theory.
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IV. Public Choice Theory
9) Why does Arrow's impossibility theorem state that aggregating individual preferences violates the criterion of transitivity (remember the three voters and the three yoghurt flavours).
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10) Explain the median-voter theory and what it helps to understand.
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11) Do the same for the rational-ignorance theory.
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