In each case listed below, can you rationalize the government policy on the basis of welfare economics?

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In each case listed below, can you rationalize the government policy on the basis of welfare economics?

a. In Los Angeles, the police respond to 127,000 burglar alarm calls per year. There is no charge. (Ninety-seven percent of the alarms are false.)

b. Legislation passed in 2008 provides some families that cannot meet their mortgage payments with government-subsidized mortgages.

c. The federal government regulates cherry frozen fruit pies, requiring that at least 25 percent of each pie by weight contain cherries and that no more than 15 percent of the cherries be blemished. There are no such regulations for apple, blueberry, or peach frozen pies.

d. Legislation passed in 2008 guarantees American sugar producers 85 percent of the domestic sugar market.

e. The National Energy Policy Act requires that all new toilets flush with only 1.6 gallons of water. Most American homes have toilets that consume 5.5 to 7 gallons per flush.

f. The United States currently provides a 51 cent per gallon subsidy for ethanol.

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Public Finance

ISBN: 9780073511351

9th Edition

Authors: Harvey Rosen, Robert Guell, Ted Gayer

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