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Questions and Answers
According to Proposition 1, when can state intervention increase efficiency?
According to Proposition 1, when can state intervention increase efficiency?
- When the market is perfectly efficient
- When all first-best assumptions hold true
- When one or more first-best assumptions fail (correct)
- When social justice is prioritized
Proposition 2 states that if no justification exists, the interests of social justice are best served by:
Proposition 2 states that if no justification exists, the interests of social justice are best served by:
- Cash transfers (correct)
- Market competition
- Public production and allocation
- State intervention
How can social justice be improved according to the text?
How can social justice be improved according to the text?
- Through market deregulation
- By reducing government spending
- Through cash transfers (correct)
- By increasing corporate profits
Which concept justifies state intervention other than cash redistribution according to Proposition 2?
Which concept justifies state intervention other than cash redistribution according to Proposition 2?
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How can state intervention improve efficiency when first-best assumptions fail?
How can state intervention improve efficiency when first-best assumptions fail?
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What does Proposition 1 suggest may lead to an increase in efficiency?
What does Proposition 1 suggest may lead to an increase in efficiency?
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In what scenario does Proposition 2 recommend in-kind transfers for improving social justice?
In what scenario does Proposition 2 recommend in-kind transfers for improving social justice?
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Which type of arguments are required to justify state intervention other than cash redistribution?
Which type of arguments are required to justify state intervention other than cash redistribution?
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