The contributive standard (merit standard) for distributing income implies that
A) income should be distributed equally.
B) income should be distributed according to need.
C) income should be distributed according to the marginal productivity of workers.
D) a transfer should be contributed to an individual above his or her contribution to net output.
C
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A country has pasture land where cattle are allowed to graze. However, this land is threatened by overgrazing, which can lead to erosion and a reduction in the value of the land. Which of the following solutions is socially optimal?
a. Selling the pasture land to a private buyer and letting him control the grazing time b. Providing extra security to prevent grazing c. Using a layer of artificial grass to prevent grazing d. Constructing fences and allowing grazing only in one part of the pasture land at a time
If the expected inflation rate is 3 percent and banks charge a 10 percent money rate of interest, the real rate of interest is
a. 3 percent. b. 7 percent. c. 10 percent. d. 17 percent.
A firm calculated that the income elasticity of demand for its signature product was equal to (+)0.87. Based on this information, we can say that the firm's product is:
a. A substitute good b. A complementary good c. An inferior good d. A normal good
Majority voting fails to incorporate the strength of the preferences of individual voters, and therefore:
A. Reduces the power of the median voter B. Is the primary reason for public sector failure C. May produce economically inefficient outcomes D. Creates the opportunity for the fallacy of limited decisions