Attempts: Average: 1/2 8. Ag gree ment a mon Suppose that Paolo, an economist fr

Question

Attempts: Average: 1/2 8. Ag gree ment a mon Suppose that Paolo, an economist from a research institute in Texas, and Sharon, an economist from a public television program, are arguing over government intervention. The following dialogue shows an excerpt from their debate: Sharon: The usefulness of government intervention in the economy is a long-standing issue that economists continue to debate. Paolo: I feel that government involvement in the economy should be reduced because government programs cause more harm than good. Sharon: While I do agree that government programs can be inefficient, I really think they are necessary to help the less fortunate. The disagreement between these economists is most likely due to Despite their differences, with which proposition are two economis differences between perception versus reality differences in scientific judgments 0 Rent ceilings reduce the quantity and quality of availabl differences in values Having a single income tax rate would improve economie perrormance

Explanation / Answer

(1) The disagreement is due to differences in scientific judgments.

(2) Economics are most likely to agree that

- Rent ceilings reduce the quantity and quality of available housing

(A binding rent ceiling is imposed below free market rent. At lower market rent, quantity of housing demanded rises but quantity of housing supplied rises, leading to a shortage. Market quantity of housing falls, and how owners reduce the quality of housing)

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