ECN 212 Adaptive Quiz #2.3

Economists always agree on which public policy is the best. True False

False

Policies such as rent control and trade barriers persist because almost all economists agree that those policies are desirable. True False

False

There is only one explanation for why economists give conflicting advice on policy issues, and it is that they have different scientific judgments about the validity of alternative theories. True False

False

A survey of professional economists revealed that more than three-fourths of them agreed with a number of statements. Which of the following statement is NOT one of those propositions? A ceiling on rents reduces the quantity and quality of housing available. Fiscal policy has a significant stimulative impact on a less than fully employed economy. Flexible and floating exchange rates are not an effective international monetary arrangement. Tariffs and import quotas usually reduce general economic welfare.

Flexible and floating exchange rates are not an effective international monetary arrangement.

Sometimes economists disagree because their values differ. Which of the following instances best reflects this source of disagreement? One economist advises against a consumption tax because she thinks it's unfair for low-income people; another economist argues that what's fair isn't relevant. One economist believes that the labor market is strengthening because the unemployment rate is declining; another argues that the unemployment rate is not a good measure of the labor market's health. One economist believes that American jobs are being lost to over-seas manufacturers; another economist disputes this claim. One economist believes that when the tax on gasoline rises, people will reduce their consumption of gasoline; another economist argues that the demand for gasoline is inelastic and thus unresponsive to changes in the gas tax.

One economist advises against a consumption tax because she thinks it's unfair for low-income people; another economist argues that what's fair isn't relevant.

Different values are a reason for disagreement among economists. True False

True

Differences in scientific judgment between economists are similar to all of the following except physicists debating how much friction is caused by salt on the roads meteorologists debating how much snow fall we will get in the upcoming blizzard doctors debating which antibiotic is appropriate for a particular infection two biologists arguing about the fairness of health insurance premiums

two biologists arguing about the fairness of health insurance premiums

Some economists disagree because their scientific judgment differs. Which of the following instances best reflects this source of disagreement? One economist believes that the level of household saving would not be affected by a change in the tax laws; another economist believes that taxing a household's consumption would change a household's saving behavior. One economist believes in taxing cigarette manufacturers in order to try to decrease second-hand smoke; another economist believes the government should not intervene in free markets. One economist believes that everyone should be given free health care; another economist believes that free markets should determine the distribution of health care benefits in a society. One economist believes that we should have a proportional rather than a progressive tax system; another economist believes that those in the top 5% of income earners should pay a higher percentage of their income in taxes.

One economist believes that the level of household saving would not be affected by a change in the tax laws; another economist believes that taxing a household's consumption would change a household's saving behavior.

Almost all economists agree that government subsidies on ethanol in the United States should be reduced. unchanged. doubled. increased.

Reduced

A survey of professional economists revealed that more than three-fourths of them agreed with a number of statements. Which of the following statement is NOT one of those propositions? The United States should restrict employers from outsourcing work to foreign countries. Local and state governments should eliminate subsidies to professional sports franchises. The United States should eliminate agricultural subsidies. Economic growth in developed countries like the United States leads to greater levels of well-being.

The United States should restrict employers from outsourcing work to foreign countries.

What are the two basic reasons why economists often appear to give conflicting advice to policymakers? differences in scientific judgment and values differences in scientific judgment and education differences in knowledge and opinions differences in education and values

differences in scientific judgment and values

Almost all economists agree that a large federal budget deficit has an adverse effect on the economy. signals that we should increase subsidies to farmers. implies we should restructure the welfare system. is highly desirable to keep an economy healthy.

has an adverse effect on the economy.

Carol and Sharon are economists. Carol thinks that the wealthiest 5% of the US population should pay higher health insurance premiums so that those who are unemployed can still receive basic health care. Sharon thinks that the wealthiest should not be punished for their success and that the unemployed simply shouldn't receive health care if they cannot afford to pay for it themselves. In this example, Carol and Sharon disagree about the validity of a positive theory. will never come to an agreement because health care is a complicated market. have differences in scientific judgments. have differences in values.

have differences in values.

Almost all economists agree that a minimum wage increases unemployment among young and unskilled workers. creates a shortage of workers. is necessary to meet a minimum standard of living. does not affect unemployment.

increases unemployment among young and unskilled workers.

Almost all economists agree that a legitimate role for the government is subsidizing professional sports franchises. creating large federal budget deficits. managing agricultural subsidies. the redistribution of income.

the redistribution of income.