Over the last 40 years, the gap between the rich and the poor in the United States has been increasing. Economists have justified this outcome by noting that
A. efficiency can never be achieved without greater inequality.
B. inequality is not a problem.
C. inequality is a desirable policy outcome.
D. inequality is a necessary consequence of achieving greater efficiency.
E. efficiency should be achieved regardless of the cost.
Answer: D
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What will be an ideal response?
The St. Louis Federal Reserve Bank econometric model indicates that crowding out
A) is only partial. B) never occurs. C) occurs only in highly unusual circumstances. D) is complete.
Refer to Figure 10.2. At output Qm, and assuming that the monopoly has set her price to maximize profit, the consumer surplus is:
A) CDE. B) BDEF. C) ADEG. D) 0DEQm. E) none of the above
In what two ways does trade benefit consumers when firms are monopolistically competitive?
a. better quality products, increased information b. higher incomes, more dependable products d. lots of bells and whistles, higher wages d. lower prices, more variety