1. Most automobile drivers probably exceed the legal speed limits somewhat when they think they can get away with it. Does this imply they would vote for higher speed limits if given a chance?
2. Each of the 10 families on a suburban block is likely to have its own power lawn mower. Why don’t families more often share a single lawn mower? Try to enumerate the principal transaction costs that stand in the way of such a cooperative arrangement.
3. Do the relative salaries of humanities professors and football coaches at major state universities reflect the relative value of football and humanities? Do they reflect the number of years that professors and coaches must spend acquiring an education? The number of hours they work? The difficulty or unpleasantness of their work? Why do the football coaches usually receive salaries that are so much higher, often even higher than the university president?
4. Should high school history and English teachers be paid as much as science and math teachers?
A. Suppose a school district pays all high school teachers with the same years of experience the same salary, regardless of teaching field, and that this produces a surplus of history and English teachers, and a shortage of science and math teachers. Would this create a case for salary differentials?
B. How could the problem of concurrent surplus and shortage be solved without paying science and math teachers more than history and English teachers?
C. Why has the policy of identical wages in fact produced shortages of science and math teachers, along with surpluses of history and English teachers in many school districts? What factors have contributed on the demand side? On the supply side?
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