Author: Anonymous

Miscellaneous Question 2 In stores in the United States, the…

Miscellaneous Question 2 In stores in the United States, the sales tax is not included in the list price and is instead added on at the checkout counter. By contrast, in Europe the sales tax (known as the VAT) is included in the list price. Based on your knowledge of internalities, which of the following is most likely to be true. 

School Competition One strategy for improving K-12 education…

School Competition One strategy for improving K-12 education is for government to provide families with vouchers that they can use to pay for any school (public or private) of their choosing. The hope is that competition will cause schools to increase their effectiveness (or value added) in helping children learn. This is because families will migrate away from schools with low value added and towards schools with high value added. Unfortunately, empirical analysis of voucher systems has found mixed results. In some settings, vouchers have boosted learning (e.g., Colombia), while in others they have actually caused it to decline (e.g., Louisiana). Explain this disparate set of results. Under what conditions will competition cause schools to increase their value added? How is it possible that this happens in some settings but not others?

Externalities Question 2 Consider a group of friends who swi…

Externalities Question 2 Consider a group of friends who switch from driving to work to taking the bus. The additional crowding induces the bus company to add another bus at a slightly different time. Some existing passengers appreciate the flexibility of the increased service.