Discuss the controversy surrounding affirmative action. How does this controversy illustrate the trade-off between equality and efficiency?
Critics claim that affirmative action amounts to numerical quotas and compulsory hiring of unqualified workers simply because they are black or female. If this allegation is true, it exacts a toll on economic efficiency. Proponents of affirmative action argue that affirmative action is needed to redress past wrongs and to prevent discriminatory employers from claiming that they are unable to find qualified minority or female employees.
The difficulty revolves around the impossibility of deciding who is "qualified" and who is not based on purely objective criteria. What one person sees as government coercion to hire an unqualified applicant to fill a quota, another sees as a discriminatory employer being forced to mend his or her ways. Putting more women and members of minority groups into high-paying jobs would certainly make the income distribution more equal. Supporters of affirmative action seek that result. But if affirmative action disrupts industry and requires firms to replace "qualified" white males with other, "less qualified" workers, the nation's productivity will suffer.
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Which of the following reduced the demand stimulus effects of monetary policy during the years following the 2008-2009 recession?
a. Failure of the Fed to provide sufficient reserves to the banking system for the extension of new loans. b. A substantial reduction in the velocity of money resulting from the historically low interest rates. c. The Fed's high interest rate policy that reduced private investment. d. Inability of the Fed to gain approval from Congress to purchase assets other than bonds issued by the federal government.
The principle of diminishing returns to labor is based on the:
A. principle of increasing opportunity cost. B. scarcity principle. C. cost-benefit principle. D. principle of comparative advantage.
A monopoly
A. Maximizes profits at the output level where MR > MC. B. Produces less output than a competitive industry, ceteris paribus. C. Maximizes profits at the output where P = MR. D. Charges the same price as a competitive industry, ceteris paribus.
Which of the following legal subjects is most concerned with the economic function of the legal system?
A. criminal law B. civil rights C. public goods D. antitrust legislation