Recap: Public Policy Analysis - Day 2

It states that if private parties can bargain without cost over the allocation of resources, then the private market will always solve the problem of externalities on its own and allocate resources efficiently.

• Path Dependence

• Nudge Theory

• Pigouvian Taxes

• Coase Theorem

Described as people trying to avoid losses in their well-being, money, and so on, more than they try to pursue gains.

• Path Dependence

• Endowment Effect/Loss Aversion

• External Cost

• Nudge Theory

Privatization is the transfer of ownership from the private sector to the public sector.

• True

• False

Answer explanation

Privatization is the transfer of ownership from the public sector to the private sector.

Tariff is a tax on foreign goods upon importation.

• TRUE

• FALSE

___ is a bond which is worth a certain monetary value and which may only be spent on goods and services.

• Coupon

• Voucher

• Subsidy

• Incentive

A political scientist who in 2009 became the first-ever woman to receive the prestigious Nobel Memorial Prize in Economic Sciences for her research in analyzing economic governance, with a focus on managing finite common-pool resources within a community.

• Joan Robinson

• Edith Abbott

• Elinor Ostrom

• Carmen Reinhart

The best remedy for market failures is not to replace the market but to make it work.

• TRUE

• FALSE

Tradable permits or carbon credits provide incentives for firms to develop technologies that are more polluting.

• TRUE

• FALSE

Answer explanation

Tradable permits or carbon credits provide incentives for firms to develop technologies that are less polluting.

______ regulation is frequently used as a method of preventing monopolies from charging rent-maximizing prices.

• Quantity

• Price

• Product

• Supply

Quantity regulation is more flexible and more efficient than market incentives but provides greater certainty of outcomes.

• TRUE

• FALSE