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macroeconomics
Exploring Macroeconomics 5th Edition Robert L. Sexton - Solutions
Why might frictional unemployment be higher in a period of plentiful jobs (low unemployment)?
What types of unemployment are present at full employment (at the natural rate of unemployment)?
What is the traditional government policy “cure” for cyclical unemployment?
Why might a job retraining program be a more useful policy to address structural unemployment than to address frictional unemployment?
Why do we want some frictional unemployment?
Are layoffs more prevalent during a recession than a recovery? Do most resignations occur during a recovery?
What is the natural rate of unemployment?
What is cyclical unemployment?
What is structural unemployment?
What is frictional unemployment?
What are the three types of unemployment?
What happens to the unemployment rate when officially unemployed people become discouraged workers?Does anything happen to employment in this case?
What would happen to the unemployment rate if a substantial group of unemployed people started going to school full time? What would happen to the size of the labor force?
Suppose you live in a community of 100 people. If 80 people are over 16 years old and 72 people are willing and able to work, what is the unemployment rate in this community?
Why might the fraction of the unemployed who are job leavers be higher in a period of strong labor demand?
How might the official unemployment rate understate the “true” degree of unemployment? How might it overstate it?
What happens to the unemployment rate when the number of unemployed people increases, ceteris paribus?When the labor force grows, ceteris paribus?
What is the Employment Act of 1946? Why was it significant?
What are the three major economic goals of most societies?
How long are people typically unemployed?
What causes unemployment?
Does unemployment affect everyone equally?
What is the unemployment rate?
What are the consequences of unemployment?
How has the United States shown its commitment to these goals?
What are the most important macroeconomic goals in the United States?
Why can’t the majority of citizens effectively counter the political power of special interest groups?
Why is it rational to be relatively less informed about most political choices than about your own market choices?
Why is the tendency strong for candidates to choose positions in the middle of the distribution of voter preferences?
What principles does the public choice analysis of government behavior share with the economic analysis of market behavior?
Why would the government want to prevent market conditions of insufficient competition?
How does the government use taxes, subsidies, and transfer payments to redistribute income toward lower-income groups?
Why do owners with clear property rights have incentives to use their property efficiently?
How is a gas tax an example of the benefits received principle?
Why is the federal income tax an example of the ability to pay principle?
How could a flat tax also be a progressive tax?
Why are excise taxes on items such as alcohol, tobacco, and gasoline considered regressive taxes?
What happens to the proportion of income paid as taxes when income rises, for a progressive tax? What is an example of such a progressive tax?
What finances the majority of federal government spending?
Has federal government spending as a fraction of GDP changed much since the 1960s?
What tools does the government use to redistribute income?
How does government discourage insufficient competition?
What is the role of the legal system?
What are private property rights?
What is a consumption tax?
What is the benefits received principle?
What is vertical equity?
What is the ability to pay principle?
What is a flat tax?
What are progressive and regressive taxes?
On what does the public sector spend its money?
How does government finance its spending?
Why do special interest groups arise?
What is rational ignorance?
What is the median voter model?
What is public choice theory?
Why is the winner’s curse less likely for repeat-purchase items?
Why might withdrawals in several classes send a poor signal to potential employers?
If where you got your college degree acted as a signaling device to potential employers, why would you want the school from which you graduated to raise its academic standards after you leave?
How do substantial warranties offered by sellers of used cars act to help protect buyers from the problem of asymmetric information and adverse selection? Why might too extensive a warranty lead to a moral hazard problem?
What is moral hazard?
What is adverse selection?
What is asymmetric information?
What is the tragedy of the commons?
What is a common resource?
In what way can government provision of public goods solve the free-rider problem?
Why does the free-rider problem arise in the case of public goods?
How are public goods different from private goods?
Why do most cities have more stringent noise laws for the early morning and late evening hours than for during the day?
How can the government intervene to force external benefits to be internalized?
How do external benefits affect the output of an activity that causes them?
How can the government intervene to force producers to internalize external costs?
How do external costs affect the price and output of a polluting activity?
Why are externalities also called spillover effects?
What is the tragedy of the commons?
What is a common resource good?
Why does the government provide public goods?
What is the free-rider problem?
What is a public good?
How are positive externalities internalized?
What is a positive externality?
How are negative externalities internalized?
What is a negative externality?
Why does a deficiency payment program have the same welfare cost analysis as a subsidy?
What causes the welfare cost of subsidies?
What would be the effect of a price floor if the government does not buy up the surplus?
What would be the effect of a price ceiling?
What impact would a larger tax have on trade in the market? What will happen to the size of the deadweight loss?
If both supply and demand were highly elastic, how large would the effect be on the quantity exchanged, the tax revenue, and the welfare costs of a tax?
How does the elasticity of demand represent the ability of buyers to “dodge” a tax?
Could a tax be imposed without a welfare cost?
What are the welfare effects of price controls?
What are the welfare effects of subsidies?
What is the relationship between a deadweight loss and price elasticities?
What are the welfare effects of a tax?
Why does an expansion in output beyond the efficient level create a deadweight loss?
Why does a reduction in output below the efficient level create a deadweight loss?
Why is the efficient level of output in an industry defined as the output where the sum of consumer and producer surplus is maximized?
Why might the producer surplus from sales of diamond rings, which are expensive, be less than the producer surplus from sales of far less expensive stones?
Why does an increase in a good’s price increase the producer surplus from production of that good?
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