Question: 1. In which of the following markets do you expect efficient outcomes? Why?
a Flood insurance for beach houses
b. Medical care
c. Stock market
d. A Personal computers
e. Loans for students who wish to attend college
f. Car insurance
2. In recent years, a number of states have instituted taxes on patrons of nude and topless dance bars. Such taxes are known as "sin taxes," because they target behavior that is believed to be sinful. How do sin taxes relate to the notion of merit goods?