How does the idea of a leaky bucket relate to the study of income distribution?
What will be an ideal response?
The idea is drawn from the writings of the late Arthur Okun, who used it to illustrate the trade-off between equality and efficiency. If we wish to transport water with a leaky bucket, some is lost. A small loss may be acceptable, but a larger loss may mean that we need a new bucket. By analogy, an income redistribution program that reduces inequality and entails a small loss of efficiency (GDP output and growth) may be acceptable. However, redistribution that has a large loss of efficiency will be unpopular and may not be wise.
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If a legal ceiling price causes the quantity of a good demanded to be greater than the quantity supplied
A) competition among both buyers and sellers is prevented. B) competition among buyers is prevented. C) competition among sellers is prevented. D) competition among buyers will raise the nonmonetary costs of obtaining the good.
Why is money you receive at some future date worth less to you than money you receive today?
What will be an ideal response?
The optimal quantity of pollution is: a. zero
b. the level where the marginal cost of pollution abatement exceeds the marginal benefit of pollution abatement by the greatest amount. c. the level where the marginal benefit of pollution abatement exceeds the marginal cost of pollution abatement by the greatest amount. d. none of the above.
The short-run supply curve for a good is upward sloping because it is possible for producers to completely adjust the resources used in production in response to price changes
Indicate whether the statement is true or false