Author Question: Why do economists generally favor vouchers to achieve an efficient outcome? What will be an ideal ... (Read 89 times)

TFauchery · **on:** Jun 29, 2018

Why do economists generally favor vouchers to achieve an efficient outcome?

What will be an ideal response?

Question 2

Refer to Table 4-14. The equations above describe the demand and supply for Pauline's Pickled Pomegranates. The equilibrium price and quantity for Pauline's Pickled Pomegranates are 30 and 15 thousand units. What is the value of consumer surplus?

A) 50 thousand B) 112.5 thousand C) 225 thousand D) 337.5 thousand

Yixagurpuldink · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

Economists generally favor vouchers because they allow for competition and they limit the opportunity for overproduction. First, a voucher gives the consumer of the good the buying power, which forces producers to compete for business. Vouchers allow for competition between public producers and private producers. Second, vouchers can also limit overproduction because setting the value of the vouchers and the total voucher budget is transparent so that bureaucrats have less ability to pad their budgets. In addition, vouchers spread the spending over millions of consumers so no one consumer has the incentive to lobby for increased spending.

Answer to Question 2

C