Explain how government policies that redistribute income from the rich to the poor might reduce efficiency
They reduce the reward for working hard. As a result, people work less and produce fewer goods and services.
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When the price of summer tank tops falls and you buy more of it because it is relatively less expensive, this is called
a) The substitution effect b) The income effect c) The net effect of both the substitution effect and the income effect d) The equilibrium choice for hours worked.
If the current period has a CPI of 143, then the amount of inflation since the base period is
A) 143 percent. B) 157 percent. C) 57 percent. D) 43 percent. E) unknown without knowing the base period's CPI.
If controlling the level of military expenditures is the most important goal, the most appropriate type of procurement contract would be _____
a. fixed fee b. cost plus fixed fee c. cost plus percentage fee d. cost plus incentive fee
Give an example of government intervention that is intended to reduce an externality