Author Question: The Indian government constructs houses for the homeless, to move them out of the slums. Soon as ... (Read 73 times)

mcmcdaniel · **on:** Jul 1, 2018

The Indian government constructs houses for the homeless, to move them out of the slums. Soon as these houses are constructed, the homeless, rent them out and moved to another slum. Where could the policy have gone wrong?
a. The policy would have been much more effective had the poor been given the cash equivalent of the house, to allocate effectively by themselves.
b. The government did not allocate the funds to their highest use, as per the needs of the homeless.
c. The government failed to run the policy effectively.
d. Both A & B

Question 2

When taxes are levied on transactions, irrespective of the party they are levied on,
a. The government can absorb all the consumer surplus from the transactions as revenue
b. The government can absorb all the producer surplus from the transactions as revenue
c. The government can absorb some of the surplus, but also creates a social loss since some of the wealth creating transactions are discouraged
d. The government can absorb all of the surplus (producer and consumer)