Chapter 1
#2. Rising unemployment is related to social and economic deficiency - there is some relationship between rising unemployment and rising crime and falling social displacement (increased divorce, worsening health and lower life expectancy). Areas of high unemployment will also see a decline in real income and spending together with a rising scale of relative poverty and income inequality. Unemployment also costs the government several amounts of money to pay the unemployed individuals.
#5. Consumer surplus is the amount that consumers benefit by being able to purchase a product for a price that is less than they would be willing to pay. The producer surplus is the amount that producers benefit by selling at a market price mechanism that is higher than they would be willing to sell for. It depends on if they are buying the product from a consumer or producer that will determine what price to sell the product to maximize profits.
#6. Price mechanism is an economic term that refers to the buyers and sellers who negotiate prices of goods or services depending on demand and supply. If there is more demand for a certain product the prices tend to go up. I believe this would not be very equitable due to the fact of the changes in the economy and the fact of people being unemployed.
#7. The equilibrium price would be $16.00 at a quantity of 800 apples. The supply hasn’t increased however the price has. The new equilibrium price is $20.00 and the quantity is 600. Chapter 2
#1. A good or service provided by government and paid for through taxes, for example, mail delivery, police, schools, roads, and safety inspections. Law enforcement agencies, military, and public school officials.
#2. In economics, the free rider problem refers to a situation where some individuals in a population either consume more than their fair share of a common resource, or pay less than their fair share of the cost of a common resource. The free-rider problem is the primary reason that public goods are produced by governments. Because public goods are characterized by the failure to exclude nonpayers, once a public good is produced anyone, everyone, can consume without making payment, that is, get a "free ride." Voluntary payments like those occurring in markets will not provide enough revenue to pay production costs. The only way to finance public goods is to force free-riders, and everyone else, to pay through government taxes. The free-rider problem also applies to common-property goods.
#4. The benefits of crime prevention are to help protect us as citizens. They create programs and design beneficial thing to help keep people from preventing crime. Without crime prevention society and the world would be all disarranged and people would be committing crimes with no problem. The cost of crime prevention is in the billions for us to pay everyone, house inmates, and pay for all the costs of criminals.
#5. The significance of the demand for drugs very high in the United States. If they chose to legalize drugs in the U.S. they would then be able to tax and make money off of the illegal drugs. However, there are several lawmakers who disagree and think that illegal drugs should remain illegal.
#6. They can put a tax on illegal drugs which would then earn the government several millions of dollars. It would basically be the same tax. They tax cigarette companies to earn money from them. They could tax drug providers in the same way. The government is basically allowing companies to provide harmful substances for people to purchase. Even though the government knows they are bad they continue to allow it due to the money they make off of the tax. No we tax them to allow the government to make millions of dollars. Chapter 3
#1. Polluters pollute due to the fact of the cost of spillover. The automobile company’s and citizens create a lot of pollution to the atmosphere. Businesses have things that they let into the air that I believe they sometimes can’t control. We as citizens drive automobiles that let fumes into the air without even realizing it.
#2. As the nation moves into the 21st century, it is becoming increasingly apparent that the current approach to natural resource use (including energy) and environmental protection may need modification to successfully address the long-term stresses affecting so many of our nation’s and the world’s natural ecosystems. Evidence of this stress can be found on many fronts, including useless fresh water supplies, failing fisheries, multiple energy crises, and accelerated loss of biodiversity. Similarly, the globalization of agribusiness joined with increasing concentration in the nation’s agriculture sector raises questions about whether the historic agriculture subsidy and support structures remain appropriate.
#3. The federal government has, however, estimated a subset of costs—namely, direct expenditures on pollution controls. These expenditures cost governments and private entities an estimated $50 billion plus in 2002 alone. Some thirty-one billion dollars was spent on air-pollution abatement, seventeen billion on water-pollution controls, and eight billion for a variety of solid waste, hazardous waste, and other programs.
#10. Ethanol is a very inefficient fuel. Nobody would use it if it were not subsidized by the government. That doesn't mean government subsidies make anything more efficient. It just means that companies can now sell expensive ethanol for less than the market price of gasoline and still make a profit. And as long as the market price of ethanol is cheap enough, people will buy it for their cars even if the cost of producing the ethanol is very high (with the government subsidizing the difference between the low price and the high cost so the producers make a profit). That means producers will start producing more ethanol, consumers will buy more, and we can gradually develop a growing ethanol sector. The government could tax gasoline and subsidize ethanol to allow people to afford ethanol and allow auto companies to make more cars that can use ethanol.
#13. The larger cities tend to be very over populated. People want more roads to be able to get to one place to the other quicker. However they need to consider the labor costs and the effects on our global system that it takes to do that. If people had the opportunity to use mass transit to travel in and out the city it would help the economy tremendously. The city would be much cleaner and more efficient more than ever. The government could regulate how much traffic can commute through the city. There is so much traffic in big cities in causes frustration and confusion to several people.