Public Finance and Public Choice

2.2. Answers to Try It! Problems

1. This is an attempt to deal with monopoly, so it is a response to imperfect competition.
2. Cigarette consumption may result from an irrational decision.
3. Protecting the earth from such a calamity is an example of a public good.
4. Food Stamps are a means-tested program to redistribute income.
5. Social Security is an example of a non-means-tested income redistribution program.
6. This is a response to external costs.
7. This is a response to monopoly, so it falls under the imperfect competition heading.