In your own words (no quotes), make an effective economic argument (one that is convincing) consisting of (i) at least one normative statement or economic goal bolstered by (ii) at least three positive or factual statements.

Economics

Saint Cloud State University

Question Description

Context: Normative economic statements are economic policy goals and values (opinions). There are two types of economic goals: efficiency and equity. We will begin with efficiency, which is covered extensively in Chapter 4.

Consider these policies:

One: Substantial subsidies to college education, assuming that there is a positive externality to acquiring a college degree. (related to Chapter 4 reading)

Two: Large taxes or penalties for farmers who overuse pesticides and fertilizer, causing runoff into public waterways (a negative externality). (related to Chapter 4 reading)

Three: Tariffs on imported goods. (related to Chapter 26 reading)

Task: Make one substantive but succinct post (75-150 words) to the Activity 4: Normative Economics (Efficiency) Forum. For your post:

  • Pick one of the policies above, start your own thread and, based only on your reading in Chapters 4 and 26, briefly give an efficiency argument for or against that policy.

Criteria: In your own words (no quotes), make an effective economic argument (one that is convincing) consisting of (i) at least one normative statement or economic goal bolstered by (ii) at least three positive or factual statements. The chosen statement, or a rewording, can be the first sentence in your post, bolstered with several sentences that bring in facts and/or concepts from the chapter. Your post should be clear (readable) and free of distracting grammatical errors and misspellings. Do not use 'I believe' or similar phrases. Do not make your post too long. Here is an example from Chapter 3 with the normative statement underlined:

Rent controls should never be used, even in cities where rapidly rising apartment rents are causing hardship for low-income residents. A type of price ceiling, rent controls exacerbate the problem of scare affordable housing by both encouraging more renters seeking apartments and discouraging more landlords from offering apartments for rent. A shortage is created and allocation inefficiencies occur because (1) there is no guarantee that the highest valued users are the ones who obtain apartments, (2) resources best allocated to rental apartments are instead reallocated to other uses such as condos and office buildings, and (3) the existing stock of apartment buildings is not efficiently maintained and deteriorates rapidly.

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