How do income redistribution programs affect equality and efficiency?
What will be an ideal response?
Programs intended to improve equality by redistributing income from the richer to the poorer may reduce efficiency in several ways. They may discourage the recipients from working to enhance their own incomes, and they may simultaneously discourage the richer people from working since their after-tax incomes will be reduced.
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A national taco chain offers in-house customers free refills on drinks. It is clearly
A) attempting to increase its total profit. B) generating a negative externality. C) generating a positive externality. D) engaging in predatory pricing. E) doing none of the above.
When the marginal product of labor is a maximum, the average product of labor is ________
A) a maximum B) increasing C) decreasing D) equal to marginal product
Most economists today recognize that a short-run macro failure is possible.
Answer the following statement true (T) or false (F)
What is the difference between "shutting down temporarily" and "exiting the industry"?
What will be an ideal response?