1. Has poverty in the United States been eliminated as a result of transfers to the poor? What are some of the problems involved in measuring poverty?
2. Explain why the negative income tax plan is likely to be more expensive than the current system of assistance to the poor. What are the advantages of wage rate subsidies?
3. In Chapter 3 we defined positive externalities. In Chapter 4 we further developed the idea of public goods as sources of positive externalities. What are some of the positive externalities that result from income support for the poor?