Novels! Songs! Highly specific methods of preparing frozen meat for at-home Philly cheesesteaks! These are all examples of what?
IP includes processes and methods, like how exactly to cut meat in an innovative way — and also, FWIW, methods and devices to walk a dog on a leash while riding a bicycle or to scatter cremains from an aircraft.
Which of the following is NOT an objective of taxes?
To economists, taxes have many potential purposes, including raising revenue and incentivizing certain behaviors. But not all taxes have all these goals.
“Inclusive” institutions uphold economic freedoms, the rule of law, property rights and broad access to political power. Inclusive government institutions also play a key role in why some nations grow rich. Which of the following would NOT qualify as an inclusive institution?
“Inclusive” institutions are in contrast to “extractive” institutions that concentrate power and wealth, like colonial systems, authoritarian regimes or economies with nepotism, cronyism and corruption.
Which of these is an example of a Pigouvian tax?
A Pigouvian tax (named for economist Arthur Pigou) is a tax on producers of products or activities with negative side effects. It’s meant to curb behavior the government deems undesirable. Some other examples: congestion pricing, plastic bag fees and a Tobin tax on financial market speculation.
When the free market produces too much or too little of something, that’s one example of a “market failure,” and the government sometimes has to step in to fix the problem. Which of the following is a common example of a market failure?
Correct! To prevent overfishing, Alaska first limited the length of the halibut fishing season, but this made fishers rush, leading to dangerous, supershort “derby days.” The eventual fix was to cap the amount of fish they could catch instead.
In 2011, Argentina tried to grow a whole new sector of its economy: cellphones. Specifically, a BlackBerry phone made entirely domestically. (Spoiler: It did not go well.) A government trying to spark a domestic industry is called:
You got it! There are better and worse ways for a government to try to “bring manufacturing home,” including subsidizing an “infant industry” until it can compete globally and then removing subsidies. That is not how it went with the Argentine BlackBerry.
The U.S. government sets a minimum price for sugar. Not such a free market. What economic concept explains why it can be nearly impossible to undo a regulation once it is in place, like, say, a guaranteed minimum price for sugar?
To help the U.S. sugar industry survive against cheap, subsidized imported sugar, the U.S. government set a price floor on sugar. Everything all of us buy that has sugar in it is more expensive, but only a little more — not so much that all the candy-eaters in America will call Congress about it. Those are the diffuse costs. But the benefits of this are concentrated on a few sugar producers that are highly motivated to lobby to keep the protection in place.
Which agency is responsible for modeling the cost of every piece of government legislation?
For a dramatized version of what this is like, please enjoy this TikTok video we made.
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