MCQ Walkthrough 9708/32 (India) (Q21 - Q30)
7 years ago
It's true: AIDS is nature's awful retribution for our tolerance of
immoderate and socially irresponsible sexual behavior. The epidemic is
the price of our permissive attitudes toward monogamy, chastity, and
other forms of sexual conservatism.
You've read elsewhere about the sin of promiscuity. Let me tell you about the sin of self-restraint.
Suppose you walk into a bar and find four potential sex partners. Two
are highly promiscuous; the others venture out only once a year. The
promiscuous ones are, of course, more likely to be HIV-positive. That
gives you a 50-50 chance of finding a relatively safe match.
But suppose all once-a-year revelers could be transformed into
twice-a-year revelers. Then, on any given night, you'd run into twice as
many of them. Those two promiscuous bar patrons would be outnumbered by
four of their more cautious rivals. Your odds of a relatively safe
match just went up from 50-50 to four out of six.
That's why increased activity by sexual conservatives can slow down
the rate of infection and reduce the prevalence of AIDS. In fact,
according to Professor Michael Kremer of MIT's economics department, the
spread of AIDS in England could plausibly be retarded if everyone with
fewer than about 2.25 partners per year were to take additional partners
more frequently. That covers three-quarters of British heterosexuals
between the ages of 18 and 45. (Much of this column is inspired by Professor Kremer's research.)
If multiple partnerships save lives, then monogamy can be deadly.
Imagine a country where almost all women are monogamous, while all men
demand two female partners per year. Under those conditions, a few
prostitutes end up servicing all the men. Before long, the prostitutes
are infected; they pass the disease to the men; and the men bring it
home to their monogamous wives. But if each of those monogamous wives
was willing to take on one extramarital partner, the market for
prostitution would die out, and the virus, unable to spread fast enough
to maintain itself, might die out along with it.
Or consider Joan, who attended a party where she ought to have met
the charming and healthy Martin. Unfortunately Fate, through its agents
at the Centers for Disease Control, intervened. The morning of the
party, Martin ran across one of those CDC-sponsored subway ads touting
the virtues of abstinence. Chastened, he decided to stay home. In
Martin's absence, Joan hooked up with the equally charming but
considerably less prudent Maxwell--and Joan got AIDS. Abstinence can be
even deadlier than monogamy.
If those subway ads are more effective against the cautious Martins
than against the reckless Maxwells, then they are a threat to the
hapless Joans. This is especially so when they displace Calvin Klein
ads, which might have put Martin in a more socially beneficent mood.
You might object that even if Martin had dallied with Joan, he would
only have freed Maxwell to prey on another equally innocent victim. To
this there are two replies. First, we don't know that Maxwell would have
found another partner: Without Joan, he might have struck out that
night. Second, reducing the rate of HIV transmission is in any event not
the only social goal worth pursuing: If it were, we'd outlaw sex
entirely. What we really want is to minimize the number of infections
resulting from any given number of sexual encounters; the flip side of
this observation is that it is desirable to maximize the number of
(consensual) sexual encounters leading up to any given number of
infections. Even if Martin had failed to deny Maxwell a conquest that
evening, and thus failed to slow the epidemic, he could at least have made someone happy.
To an economist, it's clear why people with limited sexual pasts
choose to supply too little sex in the present: Their services are
underpriced. If sexual conservatives could effectively advertise their
histories, HIV-conscious suitors would compete to lavish them with
attention. But that doesn't happen, because such conservatives are hard
to identify. Insufficiently rewarded for relaxing their standards, they
relax their standards insufficiently.
So a socially valuable service is under-rewarded and therefore
under-supplied. This is a problem we've experienced before. We face it
whenever a producer fails to safeguard the environment.
Extrapolating from their usual response to environmental issues, I
assume that liberals will want to attack the problem of excessive sexual
restraint through coercive regulation. As a devotee of the price
system, I'd prefer to encourage good behavior through an appropriate
system of subsidies.
The question is: How do we subsidize Martin's sexual awakening
without simultaneously subsidizing Maxwell's ongoing predations? Just
paying people to have sex won't work--not with Maxwell around to reap
the bulk of the rewards. The key is to subsidize something that is used
in conjunction with sex and that Martin values more than Maxwell.
Quite plausibly, that something is condoms. Maxwell knows that he is
more likely than Martin to be infected already, and hence probably
values condoms less than Martin does. Subsidized condoms could be just
the ticket for luring Martin out of his shell without stirring Maxwell
to a new frenzy of activity.
As it happens, there is another reason to subsidize condoms: Condom
use itself is under-rewarded. When you use one, you are protecting both
yourself and your future partners, but you are rewarded (with a lower
chance of infection) only for protecting yourself. Your future partners
don't know about your past condom use and therefore can't reward it with
extravagant courtship. That means you fail to capture the benefits
you're conferring, and as a result, condoms are underused.
It is often argued that subsidized (or free) condoms have an upside
and a downside: The upside is that they reduce the risk from a given
encounter, and the downside is that they encourage more encounters. But
it's plausible that in reality, that's not an upside and a
downside--it's two upsides. Without the subsidies, people don't use
enough condoms, and the sort of people who most value condoms don't have
enough sex partners.
All these problems--along with the case for subsidies--would vanish
if our sexual pasts could somehow be made visible, so that future
partners could reward past prudence and thereby provide appropriate
incentives. Perhaps technology can ultimately make that solution
feasible. (I envision the pornography of the future: "Her skirt slid to
the floor and his gaze came to rest on her thigh, where the imbedded
monitor read, 'This site has been accessed 314 times.' ") But until
then, the best we can do is to make condoms inexpensive--and get rid of
those subway ads.
If the price for inferior good rises the difference between inferior good and normal good will get less and because of that more people will switch to the normal good.
Yes but not everyone. I am referring to the people that do NOT switch!
In addition to that if the price of an inferior good rises it doesn't mean that the real income of all people becomes less. It will become less only for those who buy only that good.
I think the answer could be :
If the real income falls because of people spent more on inferior goods, therefore the inferior goods wont be demanded more because they bought inferior goods already.
But if the good is a consumer non-durable then there may be regular puchases
Rise in price of inferior goods will depend on how much demand response to the change in prise, it does not depend on the YED.