Public Policy Pt. 2 flashcards

All 20 cards

1. Card 1

   Explain the core distinction between the Classical Conservative View and Classical Liberalism regarding individual rights and societal structure.

   The Classical Conservative View emphasized the reciprocal rights and duties of individuals within an organic society, stressing interconnectedness. In contrast, Classical Liberalism focused on the inherent rights of individuals and the state's primary obligation to protect those rights, prioritizing individual autonomy over collective duties.

2. Card 2

   DEFINITION: Define the concept of 'scarcity' in economics and clarify how it differs from 'poverty'.

   Scarcity refers to the fundamental economic problem where human wants are greater than the limited resources available to satisfy those wants. It is not to be equated with poverty, as scarcity implies insufficient resources to satisfy all wants for everyone, regardless of their wealth, whereas poverty refers to a lack of sufficient income or resources to meet basic needs.

3. Card 3

   According to the source notes, which of the following is NOT one of the three fundamental questions societies must address due to scarcity? A) What to produce with limited resources? B) How to produce the goods and services selected? C) When to consume the goods and services produced? D) To whom the goods and services are distributed?

   C) When to consume the goods and services produced? The three fundamental questions identified are what to produce, how to produce, and to whom goods and services are distributed.

4. Card 4

   How does the concept of 'opportunity cost' relate to the Production Possibilities Frontier (PPF) curve, and what does it imply about economic choices?

   Opportunity cost is the most highly valued opportunity forfeited by a choice, implying tradeoffs. On a PPF curve, moving from one point to another illustrates opportunity cost: producing more of one good necessitates producing less of another. This curve summarizes hypothetical choices and provides a menu of output choices, highlighting the inherent tradeoffs due to scarcity.

5. Card 5

   DEFINITION: What is the 'Social Contract' theory, and how does John Rawls's perspective contribute to this idea?

   The Social Contract theory posits that a society is, in some sense, an agreement among all its members. John Rawls further develops this by asking what kind of arrangement everyone would agree to if they were unaware of their own position in society (behind a 'veil of ignorance'), addressing the question of what constitutes a just distribution of goods.

6. Card 6

   Which of the following is an example of an 'implicit' social contract as described in the source notes? A) Laws passed by a legislative body. B) A written constitution outlining citizen rights. C) Raising one's hand in class to speak. D) A formal treaty between two nations.

   C) Raising one's hand in class to speak. The notes explicitly state that implicit social contracts are norms such as raising one's hand in class to speak, distinguishing them from explicit contracts like laws.

7. Card 7

   Explain why 'market failure' is considered a primary reason for government intervention, providing examples of its different forms.

   Market failure occurs when the market does not allocate resources efficiently, necessitating government intervention. This can manifest as externalities, such as pollution, where costs are external to private transactions; excessive market power, like monopolies, leading to misallocation due to lack of price competition; or public goods, which are nonexclusive and suffer from the free-rider problem, requiring collective provision.

8. Card 8

   DEFINITION: Distinguish between 'distributive justice' as approached by John Rawls and 'entitlement theory' as associated with Nozick.

   John Rawls's distributive justice, often linked to the 'veil of ignorance,' focuses on what constitutes an equitable distribution of resources in society, emphasizing fairness in outcomes. In contrast, Nozick's entitlement theory, while not detailed in the provided text, typically argues that the justice of a distribution depends on how it came about, emphasizing just acquisition and transfer, rather than a specific pattern of distribution.

9. Card 9

   The Preamble to the United States Constitution states the goal to 'form a more perfect Union.' When and where was this Constitution written and signed? A) 1776, Philadelphia at the Continental Congress. B) 1787, Philadelphia at the Constitutional Convention. C) 1789, New York City at the First Congress. D) 1800, Washington D.C. at the White House.

   B) 1787, Philadelphia at the Constitutional Convention. The notes explicitly state, 'US Constitution written and signed 1787 in Philadelphia at the Constitutional Convention.'

10. Card 10

    How does the 'free rider' problem relate to public goods, and why does it necessitate collective decisions for their provision?

    The free rider problem occurs with public goods because they are nonexclusive, meaning consumption by one person does not interfere with consumption by others, and it's difficult to prevent non-payers from benefiting. Individuals can benefit from the public good without contributing to its cost. This inherent characteristic causes the problem of free riders, making collective decisions, often by government, necessary to ensure these goods are provided.

11. Card 11

    DEFINITION: What is 'conservatism' according to the provided notes, and what principles does it embody?

    Conservatism, as defined in the notes, embodies principles of traditionalism, ordered liberty, and cautious reform. It reflects a preference for established institutions and practices, while allowing for gradual change rather than radical transformation.

12. Card 12

    Which of the following is NOT listed as a reason why government should intervene? A) Market Failure. B) Imperfect Information. C) Individual Entrepreneurship. D) Equity and Morality Considerations.

    C) Individual Entrepreneurship. The source notes list Market Failure, Imperfect Information, and Equity and Morality Considerations as reasons for government intervention, along with Government Failure.

13. Card 13

    Explain the role of 'imperfect information' as a justification for government intervention. What challenge does it present, and what question does it raise for policymakers?

    Imperfect information arises because decision-making requires information, but obtaining it incurs an opportunity cost. Since information can be a public good (nonexclusive, with positive externalities), it's hard to prevent others from using it once public. This raises the question for government: should it regulate behavior due to this imperfect information, or simply provide information and allow individuals to choose?

14. Card 14

    DEFINITION: Define 'opportunity cost' and explain its significance in economic decision-making.

    Opportunity cost is defined as the most highly valued opportunity forfeited by a choice. Its significance lies in the fact that every decision involves tradeoffs, meaning that choosing one option inherently means giving up the benefits of the next best alternative. This concept is central to understanding how individuals and societies allocate scarce resources.

15. Card 15

    What concept is illustrated by the 'Production Possibilities Frontier Curve' in the context of scarcity? A) The unlimited nature of human wants. B) The cost of government intervention. C) The menu of output choices between any two alternatives. D) The relationship between supply and demand.

    C) The menu of output choices between any two alternatives. The notes explicitly state that the Production Possibilities Frontier (PPF) 'Provides a menu of output choices between any two alternatives,' summarizing hypothetical choices due to limited resources.

16. Card 16

    How does the Preamble to the United States Constitution reflect the idea of a 'more perfect Union' and the underlying values of the social contract?

    The Preamble outlines several goals, such as establishing justice, insuring domestic tranquility, providing for common defense, promoting general welfare, and securing liberty. These objectives collectively demonstrate an aspiration to improve upon previous agreements and create a stronger, more unified society, reflecting an explicit social contract aimed at achieving shared values and collective well-being for its members.

17. Card 17

    DEFINITION: Explain what 'externalities' are in the context of market failure and provide an example.

    Externalities are costs or benefits that are external to a private market transaction, meaning they affect a third party who is not directly involved in the production or consumption of a good or service. For example, pollution from a factory is a negative externality because its costs (e.g., health issues, environmental damage) are borne by the community, not just the factory or its customers.

18. Card 18

    According to the source, what is the 'science of economics'? A) The study of how governments create wealth. B) The science of how individuals and societies deal with unlimited resources. C) The science of how individuals and societies deal with the fact that wants are greater than limited resources. D) The analysis of political systems and their impact on trade.

    C) The science of how individuals and societies deal with the fact that wants are greater than limited resources. The notes explicitly state, 'Economics is the science of how individuals and societies deal with the fact that wants are greater than the limited resources available to satisfy those wants.'

19. Card 19

    Why are 'equity and morality considerations' listed as a reason for government intervention, even if markets are otherwise functioning efficiently?

    Equity and morality considerations justify government intervention because societal values, morals, and public sentiment often dictate that government should act to address issues of fairness or ethical concerns, even when markets might be allocating resources efficiently in a purely economic sense. This acknowledges that societies have non-economic goals and principles that may override market outcomes.

20. Card 20

    DEFINITION: What is meant by 'excessive market power' as a cause of market failure, and what is its primary consequence?

    Excessive market power refers to situations where a single firm or a small group of firms has significant control over a market, such as monopolies. The primary consequence of this is the misallocation of resources, as the absence of price competition allows these entities to manipulate prices and output, leading to outcomes that are not efficient or beneficial for society as a whole.

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