Special interest group K receives a 1/100th slice of the economic pie. Its net benefit from either an economic growth policy or a transfer policy is $200,000. In order for group K to be indifferent between the two policies, the economic growth policy would have to make the size of the economic pie (Real GDP) grow by _________________. This type of analysis is used to show that special interest
groups tend to press government for ______________ instead of ________________.
A) $20,000,000; economic growth; transfers
B) $2,000,000; transfers; economic growth
C) $20,000,000; transfers; economic growth
D) $20,000,000; transfers; economic growth
E) none of the above
C
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What will be an ideal response?
The International Space Station is a joint project of the United States, Russia, Japan, Canada and the European Union. This suggests that _____
a. if the space station is a public good then the optimal size of the sharing group is larger than one country b. each country would have been unable to raise the money to pay for the space station on their own c. there are significant negative externalities involved that should be spread over more individuals d. Australians do not value space exploration