Determine whether each statement is true, false, or uncertain and explain why.
(a) Suppose that candidates X and Z run for president. Candidate X is elected president after
winning 51% of the vote. Then once in office, he appoints more conservative members to
the Supreme Court than candidate Z would have. This means that a majority of American
voters preferred more conservative Supreme Court members. (Assume that everyone is
fully informed about the candidates plans and the President does not need Senate approval
to appoint Supreme Court members.)
(b) There is no reason for the government to impose social distancing to fight the epidemic
because private agents can create markets to price the corresponding externality.
(c) As CO2 emissions create a classic externality, the only policy needed to solve the problem
is a tax on carbon that would apply in all countries at the same rate and set equal to the
marginal damage created by CO2 emissions.
(d) The returns of education accrue primarily to the person receiving the education and hence
the government should not be heavily involved in the provision of education.
(e) According to the Tiebout model, local public good provision is efficient and tailored to
the tastes of local residents. Hence, it is better to have a fully decentralized government.
