STAYER ECO 450 Week 3 Quiz 2 Ch. 2 and 3
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1. The normative approach to public finance prescribes certain actions to achieve predetermined criteria.
2. Positive economic analysis is based on underlying value judgments.
3. “The government should abolish tariffs to achieve efficiency” is a normative statement.
4. It is possible for efficiency not to be attained even if all production is carried on without waste.
5. Efficiency is attained when resources are used each year in such a way that no further net gain is possible.
6. The efficient annual output of any given good is attained if that good is made available in amounts up to the point at which the total social benefit of the good equals the total social cost.
7. If the marginal social benefit of smoke detectors exceeds its marginal social cost, then additional net gains are possible from an increased annual smoke detector production.
8. Monopoly power causes losses in efficiency because the marginal social benefit of output exceeds its marginal social cost at the monopoly output.
9. Government regulations that require airlines to serve routes for which the maximum price that passengers are willing to pay for a trip fall short of the minimum price that sellers are willing to accept are likely to cause losses in efficiency.
10. Points lying below a utility possibility curve are efficient.
11. Government programs can achieve efficiency when the gains to gainers from those policies exceed the losses to those who bear the costs.
12. If the marginal social cost of beer production exceeds its marginal social benefit, then more than the efficient about of beer is being produced.
13. Efficient outcomes are often viewed as inequitable.
14. If it is not possible to make someone better off without harming...