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Assignment:

1.Suppose every member of Congress genuinely believes that governmentexpenditures are excessive and ought to be reduced by at least 10percent. Why would this not be sufficient to assure a 10 percentreduction?

2.Why do so many members of Congress believe that the federal governmentshould subsidize local projects, such as improvements in bus or subwaysystems in major cities?

A. Who would benefit from construction of a subway system in a large city?

B. Can you think of a public-interest argument for having taxpayers across the country pay for a local subway system?

C.If you knew that your taxes were going to go up $10 a year in order tofinance a subway in some distant city, would you write a letter ofprotest to your legislator?

D.If your city were being considered for a large federal grant tosubsidize an improvement in the local public transportation system,would you expect your local government officials to go to Washington andlobby actively for it? Would you expect your congressionalrepresentatives to support it? Would you form a more favorable opinionof local officials and congressional representatives if your city provedsuccessful in its grant application?

3. Shouldcountries with vast natural resources be required to help those withlittle-to-no natural resources? For example, oil-rich Qatar, whichprovides free health care to all its natural citizens, be required bylaw to provide health care to all of the citizens of Tanzania becauseits government doesn’t have the same type of natural resources? Explainyour answer.

4.How important is economic growth? Does it really make people better offin the long run? Or, as the question is sometimes misleadingly put,“Can money buy happiness?”

A.Our desires and satisfactions are often relative not only to whatothers have but also to what we ourselves have become accustomed to. Asmall amount of tasteless food can be the source of immense satisfactionto a very hungry person. Is the marginal satisfaction gained byupgrading from codfish to jumbo prawns or from processed cheese to brieas great as the marginal satisfaction in going from one cup of rice perday to two? The marginal cost of the last improvement is surely farless.

B.Advocates of zero economic growth are principally concerned about thedeleterious effects of economic growth on the environment. Does economicgrowth necessarily lower the quality of the environment?

C.The behavior of almost everyone indicates that people believe they willbe better off if they earn a larger income, because a larger incomemeans the ability to acquire more of what they want almost, but notquite, without regard to what it is that they want. But to what extentis this desire for more relative to what others have? If everyone elsein the society is also acquiring more, how much satisfaction will Iobtain from getting more? Will the marginal benefit exceed the marginalcost?