A utilitarian believes that the redistribution of income from the rich to the poor is worthwhile as long as
a. the worst-off members of society benefit from it.
b. each person's income, after taxes and transfers, reflects his marginal product.
c. the distortionary effect on work incentives is not too large.
d. those contributing to the system are in favor of it.
Answer: c. the distortionary effect on work incentives is not too large.
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In competitive markets, negative economic profits are eliminated by entry to the industry
a. True b. False Indicate whether the statement is true or false
In the graph showing aggregate demand and aggregate supply after a positive supply shock, we can see that at Point B, ______ at Point A.
a. RGDP is higher than
b. RGDP is lower than
c. price levels are the same as
d. price levels are lower than
The percentage change in the quantity supplied of a good or service when its price changes by one percent is:
A. income elasticity of supply. B. cross-price elasticity. C. price elasticity of supply. D. price elasticity of demand.
Which of the following is a normative economic statement?
A. The government should increase spending during times of economic recession. B. If banks create more money, unemployment will decrease. C. If the government increases spending, unemployment will fall. D. If the price of gasoline rises, car pooling will increase.