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INSTRUCTIONS: Read the detailed description of this   assignment as posted in our classroom. Then, answer the following ten questions to help the   governor prepare for an economic conference. Post your answers in the ten blank cells shown below. Your individual   responses should be 105 words or less; your ten responses in this table   should sum to a total of 1,050 words or less.


Why is the equilibrium of supply and demand desirable?


How   are consumer surplus and producer surplus related to the efficiency of   markets?


How   are consumer surplus and producer surplus related the costs of taxation?


How   are consumer surplus and producer surplus related to the benefits of   international trade?


Why might externalities prevent market equilibrium?


How can government policies be used to remedy the market   inefficiencies caused by negative externalities? 


How can government policies be used to remedy the market   inefficiencies caused by positive externalities? 


Discuss a real-world example of an   externality that affects you and how a government policy could (or does)   remedy the inefficiencies caused by that externality.

Hint: A “real-world” example would refer to   actual people, workplaces, events, etc. 


What is the difference between the efficiency of a tax system   and the equity of a tax system as it refers to the costs imposed on taxpayers?

Hint: See Mankiw’s discussion of the benefits   principle in Chapter 12 of the course textbook. 


Analyze the efficiency and equity of   one real-world example of a state or local tax where you reside such as, but   not limited, to: (1) state or local income taxes, (2) state or local sales   taxes, or (3) property taxes (county, town, school). 

Hint: A “real-world” example would refer to   actual people, workplaces, and/or events.

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