In each of the cases below, state whether one of the conditions for economic efficiency is violated. “Uncertain” is an acceptable response. If one of the efficiency conditions is violated, indicate which one and whether the resources in question are overused or underused.
a. The Rapid Transit District charges reduced bus fares to its senior citizens.
b. There is a limit to the number of people who can legally immigrate to the United States from India per year.
c. Some neighborhood families do not regularly mow their lawns.
d. The market for hot dogs is perfectly competitive. Michael Jordan’s consumption of a hot dog leaves fewer hot dogs available for the rest of the world.
e. The Federal Trade Commission provides free pamphlets helping potential used car buyers identify whether a car’s odometer has been rolled back.
f. A per-unit tax is applied to clothing in the context of a two-good (food-and-clothing), two-input (labor-and-capital) economy.
g. A selective minimum wage is imposed by the government on labor employed in clothing production in the context of a two-good (food-and-clothing), two-input (labor-and-capital) economy.

  • CreatedNovember 14, 2014
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