Reflective Thinking Questions
Chapters 4-6
Chapter 4
1. What is the specific market failure justification for government spending on:
a. public universities
b. health care
c. trash pickup
d. highways
e. police
f. solar energy
Would a purely private economy produce any of these services?
ANSWER:
2. Why might Fourth of July fireworks be considered a public good? Who should pay for them? What about airport security?
ANSWER:
3. If smoking generates external costs, should smoking simply be outlawed? How about cars that pollute?
ANSWER:
Chapter 5
1. Why do airlines charge different fares for the same flight?
ANSWER:
1. If all consumers had identical demand curves, could producers price discriminate?
ANSWER:
2. If the marginal utility of pizza never diminished, how many pizzas would you eat?
ANSWER:
Chapter 6
1. Is the demand for enrollments in your college price-elastic? How could you find out?
ANSWER:
3. If the price of gasoline doubled, how would consumption of cars, (b) public transportation, and (c) in-theater movies be affected? How quickly would these adjustments be made?
ANSWER:
