1. Should policy decisions be made on economic advice only?

Do policy makers take economists seriously? If so why, or why not.

Economists regard decision making as important because:

In each case, identify whether the decisions associated with any possible market failuresand whether there will be too little or too much of the activity relative to the sociallyoptimal outcome? Which policy would you recommend solving the issue?

John Maynard Keynes and Adam Smith would disagree most about the answer to which question?A.Should governments actively regulate their economies?B.Is it right for large countries to control weaker colonies?C.Is unemployment a problem in free market systems?D.Should workers unite to create a command economy?

5. The difficulty of ascertaining the right second-best trade policy to followA) reinforces support for the third-best policy approach.B) reinforces support for increasing research capabilities of government agencies.C) reinforces support for abandoning trade policy as an option.D) reinforces support for free-trade options.E) reinforces support for the domestic market failure argument.