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Economics > Evaluation > Flashcards

Evaluation Flashcards

1
Q

What are types of government failure?

A

a) Information failure
b) Admin and Enforcement Costs
c) Regulatory Capture
d) Unintended Consequences

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2
Q

Evaluate an indirect tax to solve market failure

A

a) Elasticity of demand?
b) Setting the tax at the right level
c) Regressive
d) Black markets

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3
Q

Evaluate a subsidy to solve market failure

A

a) Cost?
b) Setting subsidy at the right level
c) How will firms use subsidy
d) Price elasticity of demand

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4
Q

Evaluate regulation to solve market failure

A

a) Cost
b) Setting the right regulation
c) Black markets and Unintended Consequences
d) Equity

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5
Q

Evaluate tradable pollution permits to solve market failure

A

a) Enforcement
b) Imperfect information for government
c) Unintended consequences
d) Need for international cooperation

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6
Q

Evaluate state provision to solve market failure

A

a) Excess demand
b) Cost
c) Imperfect information
d) Inefficiency of state organisations

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7
Q

Evaluate a minimum price to solve market failure

A

a) Price elasticity of demand
b) Regressive
c) Black markets
d) Set at the right level?
e) Excess supply

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8
Q

Evaluate a maximum price to solve market failure

A

a) Shortages
b) Black markets
c) Enforcement
d) Setting the right level
e) Cost
f) Elasticity of supply and demand

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8
Q

Evaluate information provision to solve market failure

A

a) Cost
b) No guarantee of success
c) Long run vs Short run

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8
Q

Evaluate property rights to solve market failure

A

a) Can property rights be efficiently distributed? e.g. air or sea
b) Enforcement needed (cost)
c) Equity- who gets the right

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9
Q

Evaluate profit maximisation

A

a) Knowledge of MC and MR
b) Greater scrutiny
c) Key stakeholders harmed
d) Other objectives more appropriate

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10
Q

Evaluate perfect competition

A

Allocative efficiency, productive efficiency and X efficiency all achieved. No long run supernormal profit, so no dynamic efficiency.
Price competition is not possible, no non-price competition. Only cost cutting is possible but there may be little incentive for this considering perfect information.

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11
Q

Evaluate a monopoly

A

a) Dynamic Efficiency?
b) Economies or Diseconomies of Scale
c) Objective of a monopolist
d) Regulation
e) Type of good or service
f) Level of competition
g) Threat of competition
h) Natural monopoly
i) Price Discrimination

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12
Q

Evaluate a competitive market

A

a) Still dynamic efficiency?
b) Level of economies of scale
c) Natural monopoly
d) Where is cost cutting taking place
e) Role for regulation
f) Static vs Dynamic efficiency (type of good or service)

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13
Q

Evaluate monopolistic competition

A

Productive and allocative inefficiency both not as extreme as monopoly. However, some inefficiency here may be a desirable trade off for consumers in return for product differentiation. Dynamic efficiency may be achieved by investing SR supernormal profit. Or reinvestment may just be part of competition.

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14
Q

Evaluate the impact of contestability on a market

A

a) Length of contestability
b) Role of technology
c) Regulation
d) Dynamic efficiency

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15
Q

Evaluate monopoly regulation

A

a) Level of information
b) Costs vs Benefits
c) Regulatory Capture
d) Benefits of monopoly

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16
Q

Evaluate privatisation

A

a) The level of competition post privatisation
b) Level of government regulation
c) Objective of private sector firms

17
Q

Evaluate deregulation

A

a) SR vs LR
b) Height of other barriers to entry
c) Level of government regulation
d) Impact of removing regulation

18
Q

Evaluate nationalisation

A

a) Funding vs Delivery of key public services
b) PPPs better
c) Role of regulation
d) Competition in private sector
e) Size and objective of private sector firms

19
Q

Evaluate the impact of technological change on market structures

A

a) Number of firms
b) Product homogeneity
c) Knowledge
d) Barriers to entry

20
Q

Evaluate a cost-benefit analysis

A

a) Identification
b) Enumeration
c) Appropriate discount rate
d) Source (bias?)
e) Cost
f) Time
g) Subjectivities of weights/probabilities

21
Q

Evaluate behavioural economic policies

A

a) Costs vs Benefits (Gov. failure)
b) Information provision better?
c) Combination between behavioural and traditional policies is probably most effective

22
Q

Evaluate marginal revenue product theory

A

a) How to measure productivity?
b) Teamwork makes it difficult to measure individual productivity
c) The self-employed?
d) Imperfect labour markets (trade unions)

23
Q

Evaluate the impact of trade unions

A

a) Type of labour market
b) Union density
c) Success determined by union mark up
d) Real world evidence suggests limited power of trade unions (legislation, restructuring of UK economy, competitive pressures)
e) Elasticity of demand for labour

24
Q

Evaluate labour market wage differentials

A

a) How much inequality?
b) Risk of government failure
c) SR vs LR

25
Q

Evaluate the imposition of a minimum wage

A

a) Unemployment
b) Elasticity of demand?
c) Youth
d) Regional differences

26
Q

Evaluate wealth taxation

A

a) Rate
b) Assets chosen
c) Enforcement

27
Q

Evaluate financial market regulation

A

a) Moral Hazard
b) Regulatory capture
c) Equity- other firms do not get this right
d) Balance needed to protect consumers and protect against systemic risk but to maintain bank profitability
e) Regulation should promote equity without damaging efficiency
f) Costs vs Benefits

28
Q

Evaluate economic growth

A

a) Sustainable growth
b) Inclusive growth
c) Balanced growth
d) Role for private sector/ government

29
Q

Evaluate inflation

A

a) rate
b) cause
c) duration
d) anticipated vs unanticipated

30
Q

Evaluate deflation

A

a) Anticipated or unanticipated
b) Cause

31
Q

Evaluate exchange rate impacts

A

a) PED for exports and imports
b) Size of appreciation/depreciation
c) Restrictions on trade
d) Offset by other factors?
e) Depends on incomes abroad

32
Q

Evaluate fiscal policy

A

a) Size of the output gap
b) Size of the multiplier
c) Consumer/ business confidence
d) State of government finances
e) Long run returns to government
f) Laffer curve ideas
g) Role of automatic stabilisers
h) Crowding out vs crowding in
i) Classical view of a self-correcting economy

33
Q

Evaluate expansionary monetary policy

A

a) Size of the output gap
b) Consumer confidence
c) Business confidence
d) Banks willingness to pass on the full cut or willingness to lend
e) Size of the rate cut

34
Q

Evaluate supply side policies

A

a) No guarantee of success
b) Cost
c) Time lags
d) Negative stakeholder impacts
e) Output gap
f) Need for targeted supply side policies

35
Q

Evaluate policies to reduce unemployment

A

a) No guarantee of success
b) Cost
c) Time lags
d) Negative stakeholder impacts
e) Targeted

36
Q

Evaluate contractionary fiscal/monetary policy to reduce inflation

A

a) Conflict of objectives
b) Impact on investment
c) Impact on the indebted.
d) Strong exchange rate- impact on the current account deficit

37
Q

Evaluate expenditure reducing and expenditure switching policies

A

a) Conflict of objectives
b) Cause of the current account deficit
c) Time lags/ cost
d) Is the current account deficit really a problem?

38
Q

What are the assumptions of comparative advantage?

A

a) Perfect knowledge
b) No transport costs
c) No economies of scale
d) Rates of inflation ignored
e) No import controls
f) Non-price competitiveness ignored
g) Exchange rate movements ignored
h) R&D investment ignored

39
Q

Evaluate a tariff

A

a) Size of the tariff
b) Elasticity of domestic supply and demand

40
Q

Evaluate unemployment

A

a) Type- duration
b) Severity (NRU? or more)
c) Level of unemployment benefits

41
Q

Evaluate redistributive policies

A

a) Incentives
b) State of government finances
c) Equity vs Efficiency
d) Normative judgements
e) Government failure
f) Is inequality always bad?

42
Q

How do you evaluate in economics?

A

i) Weight up points on either side of the argument using theoretical power or real world evidence
ii) Consider SR and LR impacts (powerful in the judgement)
iii) Question assumptions made in your theory
iv) Consider and weigh up impact on key stakeholders (winners and losers)

Economics (6 decks)

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