Suppose there is a high inequality in household income between the highest and the lowest income groups in one country. In response, the government raises the income tax for the highest income group and provides subsidies to the lowest-income group. What
would happen to the Lorenz curve as a result of the government programs? Explain.
What will be an ideal response?
The government tax and subsidy policies would not change the Lorenz curve because it does not account for the income tax and income in kind provided by the government.
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A monopoly can charge any price it wishes, and chooses the
a. highest price b. price equal to marginal cost c. price associated with the output level where MC = MR d. competitive price to keep out potential entrants e. price associated with greatest efficiency
In a market system, ____ distributes goods among consumers in accord with their tastes and preferences, using voluntary exchange to determine who gets what
a. a price system b. a regulatory framework c. a democratic government d. a closed system
Briefly explain why having a completely clean environment has costs and may not be the best option to pursue.
What will be an ideal response?
What are the prospects for domestic capital formation in DVC?
What will be an ideal response?