Suggestions for studying for final exam:

Some Terms (remember this is by no means an exhaustive list!):

positive externality
natural monopoly
non-rival
R & D
patent
biodiversity
income-environment-inequality nexus
TRIPs
market for lemons
terms of trade

Possible essay topics -

environment
media
unpaid labor
intellectual property

In preparing for your essay, you should think about: 1. relevant theoretical concepts discussed in class, 2. empirical examples drawn from the readings/in-class discussion, 3. how this topic fits into our discussion of globalization, 4. relevance of equity/efficiency arguments, particularly focusing on income inequality issues.

Sample questions:

1. How do economists view taxes? Why do policy makers levy taxes and what are the economic and social consequences of taxes? Discuss the case of a gas tax. Be sure to discuss in your answer to discuss issues of equity and efficiency.

2. A local politician is trying to convince a group of smokers to vote for him. "I will work to eliminate the cigarette tax, because taxes distort the market and cause inefficiency.

a. Is his analysis correct?
b. Show graphically the impact of his suggestion.
c. How would your answer to part a change if he argued: "I will work to eliminate the cigarette tax, because it is a regressive tax."
d. What will be the impact on cigarette workers if the politician is successful in getting the tax repealed?

3. a. Discuss how children can be seen as both private and public good with positive externalities.
b. What polices might the government enact to ensure that children are brought up so that they will be able to contribute to the society in the future?

4. The more elastic the demand for a good is, the more effective a subsidy will be in increasing the quantity of a good consumed.

a. Comment on whether the above statement is true or false and explain why.
b. When do policymakers advocate using subsidies?

5. The government has various tools at its disposal for encouraging R & D.

a. Explain why the government may wish to encourage R & D, providing at least one example.
b. Explain how the government may encourage R & D and the impact of various policies on the p and q of the good.
c. Do any ethical issues arise concerning the policies you discussed above?