Economic questions Flashcards
How would you evaluate the cost and benefits of electric vehicles
• What are they after appraisal or post evaluation? Make sure what they are after is clear – you can always ask for clarification during the interview. • Post evaluation - what are we evaluating? • What are the objectives? SMART objectives • Thinking about reasons for intervention - what are the market failures? Is there a distributional/inequality issue? Is it strategic/politically driven? (be able to give explain the characteristics of market failures and examples). o Monopolies o Externalities o Asymmetric information o Public good o Equity reasons • What is the policy mechanism? Standards/quotas, taxes/subsidies, regulation, bans, obligation, legality/property rights (esp for externalities), nudging techniques: more cycle lanes, encourage walking, etc. Product standards, public information/education campaigns. Link this back to the market failures. • What are the alternative options? Short-list of options? • Then think about stakeholders, cost and benefits for each • Are they real costs and benefits or transfers within society? e.g. taxes • Think about what evidence we have, data sources, can we monetise it or not? • Then go into one or two cost and benefits in more detail • Counterfactual? Appraisal period? • Risk • Sensitivities • Think about evaluation and evaluation plan - why do we want to do this? Ensure policy achieves objectives and is VfM
Why should the UK increase investment in health care?
Reasons:
- Healthy workforce
- increased productivity
- more productive/growing economy
Reasons for intervening:
- Monopolies (in medication, vaccination, clinical trials etc)
- Externalities
- Asymmetric information
- Equity reasons - merit goods
- Should the NHS be free?
- Why do countries trade?
- Is inflation a problem?
What is the ROAMEF cycle?
Rationale
Objectives
Appraisal
Monitoring
Evaluation
Feedback
- What factors should the government consider when choosing whether to extend the business loan scheme?
- What is price elasticity of demand and what are its determinants?
- What factors do businesses take into account when looking to investing?
Why give unemployment benefits?
- Why is X not provided by the market?
Why does the government need to intervene for air pollution?
- How would you appraise the Eat-out-to-help-out scheme?
- Is education a public good?
- Three large pharmaceutical companies have recently announced that they’ve developed Covid 19 vaccines. How should these vaccines be distributed? Should the NHS be free?
- Using game theory, why is there political support for the trident nuclear system?
- Are Amazon/Facebook/Google too large and hindering competition?
- What is the effect of an increase/decrease in the price of oil?
- Explain currency appreciation, provide an example, and explain how a local currency appreciating in value may affect the balance of payments.
- What are the benefits of trade?
- What role does innovation have to play in the economy?
- What drives the productivity of a certain area?
What are the impacts of EU exit/ leaving a trading block ?
- Why is uncertainty bad for the economy?
- Should the UK put tariffs on incoming goods?
- What is economic growth? How is it measured? What are the drivers of it?
What is the effect of a depreciation of the currency on the economy?
- What are the effects of running a high government deficit on the economy?
- Can you explain why output per worker has flat-lined since 2008?
- After WW2, Germany experienced a period of hyperinflation. Can you explain the situation and potential remedies?
- Is inflation a problem?
- Can income inequality ever be a good thing?
What are the different types of unemployment?
- Why do countries trade?
Give examples of market failures that could justify governmetn intervention
- Market Structure/ Market Power –
- Monopolies (Natural vs organised)
- Barriers to entry
- Types of good
- Public goods – non-excludable vs non-rivalrous
- Externalities – negative and positive
- Nature of exchange
- Transaction costs
- Agency problems
- Informational Asymmetries
- Missing markets
- Adverse Selection
- Moral Hazard
- Bounded rationality
- Productive + allocative inefficiency
- Merit and de-merit goods
- Equity/equality concerns
