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Questions:
(a). Distinguish between a socialist economy, an interventionist economy and an unhampered market economy.
(b). Explain the differences between a rights-based analysis of interventionism and a means-ends analysis of interventionisrn. Which type of approach do Mises and Hayek adopt in their analysis of interventionism?
(c). A gallon of milk in Emit?nja currently sells for $5. Concerned with the fact that many poor households are unable to afford adequate amounts of milk, the President of BHEiEIJi? has decided to limit the price of a gallon of milk to $3. What will be the consequences of such a policy in the Ruritanian economy? Based on your analysis of these consequences, do you believe that the price control will achieve its stated objectives?
(d). Does the price control affect a producer with highly specific factors of production differently as compared to a producer with relatively non-speci?c factors of production? If yes, provide an explanation of these differences.
Electric utilities in California often make exchanges of power with utilities in the Pacific Northwest because their time patterns of consumption differ.
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