Some economists have argued that, because domestic consumers gain more from free trade than domestic producers gain from (import) tariffs and quotas, consumers should buy out domestic producers and rid themselves of costly tariffs and quotas. For example, if consumers save $400 million from free trade (through paying lower prices) and producers gain $100 million from tariffs and quotas, consumers can pay producers something more than $100 million but less than $400 million and get producers to favor free trade too. Assuming that this scheme were feasible, what do you think of it?
> Vaccines are biological preparations usually containing an agent that resembles a disease-causing microorganism, which is often administered by needle and which improves immunity to a particular disease. Vaccines are subject to federal premarket approval
> Johnson Controls, Inc. is a Wisconsin company that manufactures building equipment and management systems and distributes its products worldwide through direct sales, contractors, and distributors. Edman Controls, Inc. is a distribution company incorpora
> BMW North America, LLC and Rolls-Royce Motor Cars NA, LLC distribute luxury automobiles, automobile parts, and lifestyle items in the United States. These companies and their parent and affiliate companies own various trademarks bearing the “BMW” and “Ro
> Hertz Corporation is incorporated in the state of Delaware and has its headquarters in the state of New Jersey. Melinda Friend, a California citizen, sued the Hertz Corporation in California state court seeking damages for Hertz’s alleged violation of Ca
> Chanel, Inc. is a corporate entity duly organized under the laws of the state of New York, with its principal place of business in New York City. Chanel is engaged in the business of manufacturing and distributing throughout the world various luxury good
> In 1975, after the war in Vietnam, the U.S. government discontinued draft registration for men in this country. In 1980, after the Soviet Union invaded Afghanistan, President Jimmy Carter asked Congress for funds to reactivate draft registration. Preside
> When the Constitution was ratified by the original colonies in 1788, it delegated to the federal government the exclusive power to regulate commerce with Native American tribes. During the next 100 years, as the colonists migrated westward, the feder
> Two brothers were shot and killed in their Houston home. The police found shotgun shells at the scene of the crime. Witness testimony led the police to consider Genovevo Salinas to be a person of interest. Police found Salinas at his home, where he agree
> Jack Tallas immigrated to the United States from Greece. He lived in Salt Lake City for nearly 70 years, during which time he achieved considerable success in business, primarily as an insurance agent and landlord. Over a period of 14 years, Peter Dement
> Elvis Presley, a singer of great renown and a man of substantial wealth, became engaged to Ginger Alden. He was generous with the Alden family, paying for landscaping the lawn, installing a swimming pool, and making other gifts. When his fiancée’s mother
> Glende Motor Company (Glende), an automobile dealership that sold new cars, leased premises from certain landlords. One day, fire destroyed part of the leased premises, and Glende restored the leasehold premises. The landlords received payment of insuran
> The U.S. Congress directed the Secretary of the Treasury to mint and sell a stated number of specially minted commemorative coins to raise funds to restore and renovate the Statue of Liberty. The U.S. Mint mailed advertising materials to persons, includi
> Wilbert Heikkila listed eight parcels of real property for sale. David McLaughlin submitted written offers to purchase three of the parcels. Three printed purchase agreements were prepared and submitted to Heikkila, with three earnest-money checks from M
> Norma English made an offer to purchase a house owned by Michael and Laurie Montgomery (Montgomery) for $272,000. In her offer, English also proposed to purchase certain personal property— paving stones and a fireplace screen worth a total of $100—from M
> Al and Rosemary Mitchell owned a small secondhand store. The Mitchells attended Alexander’s Auction, where they frequently shopped to obtain merchandise for their business. While at the auction, they purchased a used safe for $50. They were told by the a
> For 6 years, Lee Marvin, an actor, lived with Michelle Marvin. They were not married. At the end of 6 years, Lee Marvin compelled Michelle Marvin to leave his household. He continued to support her for another year but thereafter refused to provide furth
> G. S. Adams Jr., vice president of the Washington Bank & Trust Co., met with Bruce Bickham. An agreement was reached whereby Bickham agreed to do his personal and corporate banking business with the bank, and the bank agreed to loan Bickham money at 7.5
> Selchow & Richter Company (S&R) owns the trademark to the famous board game Scrabble. Mark Landsberg wrote a book on strategy for winning at Scrabble and contracted S&R to request permission to use the Scrabble trademark. In response, S&R requested a cop
> McDonald’s Corporation owns, operates, and franchises fast-food restaurants. Over the years, McDonald’s ran promotional games such as Monopoly Game at McDonald’s, Who Wants to be a Millionaire, and other games where high-value prizes, including vehicles
> The police of the city of Indianapolis, Indiana, began to operate vehicle roadblock checkpoints on Indianapolis roads in an effort to interdict unlawful drugs. Once a car had been stopped, police questioned the driver and passengers and conducted an open
> Government agents suspected that marijuana was being grown in the home of Danny Kyllo, who lived in a triplex building in Florence, Oregon. Indoor marijuana growth typically requires high-intensity lamps. To determine whether an amount of heat was emanat
> William Wheetley, a police officer, was on a routine patrol in his police car with Aldo, a German shepherd dog trained to detect certain narcotics (methamphetamine, marijuana, cocaine, heroin, and ecstasy). Wheetley stopped Clayton Harris’s truck because
> Kentucky undercover police officers set up a controlled buy of cocaine outside an apartment complex. After the deal took place, uniformed police moved in on the suspect. The suspect ran to a breezeway of an apartment building. As the officers arrived in
> One night in 2003, Evan Miller, who was 14 years old, was smoking marijuana with another juvenile and an adult, Cole Cannon, at Cannon’s trailer. When Cannon passed out, Miller stole his wallet, splitting about $300 with the other juvenile. When Miller t
> Bernardo Garcia had served time in jail for methamphetamine (meth) offenses. On release from prison, a person reported to the police that Garcia had brought meth to her and used it with her. Another person told police that Garcia bragged that he could ma
> During a few weeks, Cecilia Gonzalez downloaded more than 1,300 copyrighted songs on her computer using a file-sharing network, and she kept them on her computer until she was caught. BMG Music, which owns the copyrights on many of the songs she download
> Dodger Productions, Inc. and Dodger Theatricals, Ltd. (Dodger) produced a stage musical called Jersey Boys. The musical is a historical dramatization about the American 1960s rock ’n’ roll singing group called the Four Seasons and the lives of its member
> Kraft Foods Group Brands LLC (Kraft) is a well-known manufacturer of food products sold in more than 15,000 grocery stores located throughout the United States. Many of its packaged cheeses that are sold in outlets are available under Kraft’s trademarked
> James W. Newton Jr. is an accomplished avant-garde jazz composer and flutist. Newton wrote the song “Choir,” a piece for flute and voice that incorporated elements of African American gospel music. Newton owns the copyright to the composition “Choir.” Th
> Zura Kazhiloti sold jewelry bearing the luxury brand names “Cartier” and “Van Cleef & Arpels” to jewelry stores. The retailers then sold the jewelry through their brick-and-mortar stores, through websites, and through the internet auction site eBay. The
> Bernard Bilski and Rand Warsaw filed a patent application with the U.S. Patent and Trademark Office (PTO). The application sought patent protection for a claimed invention that explains how buyers and sellers of commodities in the energy market can hedge
> Intex Recreation Corporation designed and sold the Extreme Sno-Tube II. This snow tube is ridden by a user down snow-covered hills and can reach speeds of 30 miles per hour. The snow tube has no steering device, and therefore a rider may end up spinning
> Taser International, Inc. manufactures a product commonly known as a “taser.” Tasers have prongs or cords that emit high-voltage electrical currents that when they touch a person’s body, immobilize the person. Tasers are often used by police forces to su
> Dwayne Maddox and his wife, Amanda, were driving home on a highway in their Nissan Pathfinder SUV. Dwayne, who was driving the vehicle, weighed 170 pounds, and Amanda, who was sitting in the passenger seat, weighed 240 pounds. Amanda had previously had a
> Western Manufacturing, Incorporated manufactures a mobile pump for the commercial application of stucco to buildings. The pump consists of a diesel engine, a mixer for the stucco, a batch hopper, a pumping mechanism, and a hose, all mounted on a two-whee
> Victoria Berridge, Robert Cook, Robert Walsh, and the pilot, Scott Cowan, boarded a Twin Otter airplane for a skydiving expedition. Shortly after takeoff, the right engine failed and the airplane crashed. All four persons aboard the airplane died because
> One morning, after working at night, Tim Clancy was driving a Chevrolet S-10 pickup truck on State Road 231. Clancy fell asleep at the wheel of the truck. Robert and Dianna Goad, husband and wife, were riding separate motorcycles on the other side of the
> Curtis R. Wilhelm owned beehives and kept the hives on property he owned. John Black, who operated a honeybee business, contracted to purchase some beehives from Wilhelm. Black employed Santos Flores Sr. to help him pick up the beehives from Wilhelm. Bla
> Zagat Survey, LLC publishes the famous Zagat series of dining, travel, and leisure guides for different cities and locations. The Zagat restaurant guides lists and ranks each reviewed restaurant from 0 to 30 for categories such as food, décor, and servic
> Four friends, John Bertram, Matt Norden, Scott Olson, and Tony Harvey, all residents of Ohio, traveled to the Upper Peninsula of Michigan to go snowmobiling. On their first day of snowmobiling, after going about 135 miles, the lead snowmobiler, Olson, ca
> One evening, Andrea Filer and her daughter were riding their horses along Riley Hill Road, a public highway in the Town of Salem, New York. At the same time, Megan Adams was jogging along the same road with her son in a stroller and two dogs by her side.
> Three teenagers, Sarah Mitchell, Adam Jacobs, and David Messer, were driving in Mitchell’s car at 2:30 a.m. in Indianapolis, Indiana. Mitchell was driving the car, Jacobs was in the front passenger seat, and Messer was in the back seat. Jacobs suggested
> The Greater Gulf State Fair, Inc. operated the Gulf State Fair in Mobile County, Alabama. One of the events at the fair was a mechanical bull ride, and participants paid money to ride the mechanical bull, a ride where the rider sits on a motorized device
> Fred Phelps founded the Westboro Baptist Church in Topeka, Kansas. The church’s congregation believes that God hates and punishes the United States. The church frequently communicates its views by picketing at military funerals. Lance Corporal Matthew Sn
> Eddie Howard and Shane D. Schneider worked as employees of Nitro-Lift Technologies, L.L.C. Howard and Schneider entered into a noncompetition agreement with Nitro-Lift whereby they agreed that they would not work for a competitor of Nitro-Lift’s for a st
> Facebook, Inc. filed a complaint in the U.S. district court against numerous defendants alleging that the named defendants engaged in trademark infringement, cybersquatting, and false designation of origin. Facebook seeks to enjoin the defendants from en
> The desire for profit can end up pushing countries toward producing goods in which they have a comparative advantage. Do you agree or disagree? Explain your answer.
> If country A is better than country B at producing all goods, will country A still be made better off by specializing and trading? Explain your answer.
> If there is a net loss to society from tariffs, why do tariffs exist?
> Although a production possibilities frontier is usually drawn for a country, one could be drawn for the world. Picture the world’s production possibilities frontier. Is the world positioned at a point on the PPF or below it? Give a reason for your answer
> Segregated neighborhoods of blue and green people can be the result of the people of each color preferring a certain type of integration over segregation. What specifically is the certain type of integration?
> For an economist, is it preferable to assume that criminals are rational than to build a theory based on a rational criminal and then check the evidence? Explain your answer.
> What does the difference between the equilibrium tuition and the student tuition have to do with instructors holding office hours?
> Put forth two observations that are inconsistent with the cost-benefit theory of burglary discussed in the chapter.
> One prediction made in the chapter was that “the owner of a car repair shop in a small town will be more careful not to overcharge customers than the owner of a car repair shop in a large city.” Why?
> According to the theory of PSST (patterns of specialization and sustainable trade), economic activity can decline in the face of unchanged aggregate demand. How so?
> A person is more likely to lose his temper with a friend than his boss. Do you agree or disagree? Explain your answer.
> What does it mean to say that a theory is falsifiable or refutable?
> What role does opportunity cost play in the theory that birth-rates are likely to be higher in some countries than others?
> Under what condition might persons buy more of something than the efficient amount for them to buy?
> People will often make charitable donations to religious organizations, but not to gangs. Why?
> A man asks his brother for $400 to buy a television set. His brother gives him the money, and the man buys a television set. Is it guaranteed that the brother’s $400 went to buy the television set? Why or why not?
> The quality of the school district can affect house prices in that district. If this statement is true, what should we observe?
> Why is it better for theories to be judged by how accurately they predict than by how they sound to us?
> John chooses not to vote in the presidential election. Does it follow that he is apathetic when it comes to presidential politics? Explain your answer.
> Provide a numerical example which shows simple-majority voting may be consistent with efficiency. Next, provide a numerical example which shows simple-majority voting may be inconsistent with efficiency.
> Suppose the combination of more accurate data and better forecasting techniques would make it easy for the Fed to predict a recession 10 to 16 months in advance. Would this state of affairs strengthen the case for activism or nonactivism? Explain your an
> What are some ways of reducing the cost of voting to voters?
> It has often been said that Democratic candidates are more liberal in Democratic primaries and Republican candidates are more conservative in Republican primaries than either is in the general election. Explain why.
> If the model of politics and government presented in this chapter is true, what are some of the things we would expect to see?
> Many individuals learn more about the car they are thinking of buying than about the candidates running for president of the United States. Explain why.
> Would voters have a greater incentive to vote in an election involving only a few registered voters or in one that has many? Why? Why might a Republican label her opponent too far left and a Democrat label his opponent too far right?
> The economist James Buchanan said, “If men should cease and desist from their talk about and their search for evil men and commence to look instead at the institutions manned by ordinary people, wide avenues for genuine social reform might appear.” What
> “Rent seeking may be rational from the individual’s perspective, but it is not rational from society’s perspective.” Do you agree or disagree? Explain your answer.
> Evaluate each of the following proposals for reform in terms of the material discussed in this chapter: (a) Linking all spending programs to visible tax hikes (b) A balanced-budget amendment stipulating that Congress cannot spend more than total tax re
> Some individuals see national defense spending as benefiting special interests—in particular, the defense industry. Others see it as directly benefiting not only the defense industry but the general public as well. Does this same difference between viewp
> Some observers maintain that not all politicians move toward the middle of the political spectrum in order to obtain votes. They often cite Barry Goldwater in the 1964 presidential election and George McGovern in the 1972 presidential election as example
> It has been suggested that non-activists are not concerned with the level of Real GDP and unemployment because most (if not all) non-activist monetary proposals set stabilization of the price level as their immediate objective. Discuss.
> The shape of the aggregate supply curve matters to one’s view of the ability of government to change Real GDP by way of demand-side fiscal policy and monetary policy. Do you agree or disagree? Explain your answer.
> Something is referred to as a “double-edged sword” if it can have both favorable and unfavorable consequences. In what way might government bailouts of failing companies or financial institutions be a double-edged sword? Explain your answer.
> Outline the details of the debate between economists who favor a rules-based monetary policy and those who favor a discretionary monetary policy.
> Some economists argue that if the economy currently needs to be stimulated to remove it from a recessionary gap, how government spends more money (on X or Y) matters less than the fact that it spends more money. Do all economists agree? If not, what do t
> Whether an economist argues in favor of a rise in government spending (as an expansionary fiscal policy measure) could have something to do with the degree of crowding out he expects as a result of the measure. Do you agree or disagree? Explain your answ
> Whether an economist argues in favor of a rise in government spending or a cut in taxes (as an expansionary fiscal policy measure) could have something to do with how he views the current size and scope of government in relationship to his optimal size a
> Whether an economist argues in favor of a rise in government spending or a cut in taxes (as an expansionary fiscal policy measure) could have something to do with whether she views the government spending multiplier as greater or less than the tax multip
> How an economist thinks the economy works—is it self-regulating or not?—influences his opinion of the role government should play in trying to stabilize the economy. Do you agree or disagree? Explain your answer.
> There is little doubt that if income tax rates are cut, the size of the budget deficit will increase. Do you agree or disagree? Explain your answer.
> What do the values of the government spending and tax multipliers have to do with getting the biggest bang for the buck?
> Explain how the monetarist transmission mechanism works.
> Can tax revenue rise and the budget deficit decline as a result of an income tax rate cut? Explain your answer.
> Some property rights structures provide more and stronger incentives to produce goods and services than other such structures do. Do you agree or disagree with this statement? Explain your answer.
> What is an institution? Why might institutions matter to how much economic growth a country experiences?
> What is the difference between business cycle macroeconomics and economic growth macroeconomics?
> How does discovering and implementing new ideas cause economic growth?
> What is new about new growth theory?
> What do interest rates and the tax treatment of the returns to capital have to do with economic growth?
> What does it mean to say that “a change in labor moves us along a given production function”?
> Why might special-interest groups favor transfer-promoting policies over growth-promoting policies?
> Why might per-capita real economic growth be a more useful measurement than absolute real economic growth?
> Explain how the Keynesian transmission mechanism works.
