Summarize the debate over the interrelationship between inequality and growth. What kinds of inequality are most crucial to the discussion?
What will be an ideal response?
The debate includes whether there is a regular relationship between inequality and growth (Kuznets' inverted "U"), and whether greater equality contributes to growth. A distinction should be made between equality of income and equality of assets, including land and human capital.
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Shaniq has seen two movies this week and two baseball games. Her marginal utility of one more movie is 20 and her marginal utility of one more baseball game is 30. Shaniq will go to a baseball game tonight, rather than to another movie
A) no matter how much more the baseball game costs compared to the movie. B) if the baseball game costs $10.00 and the movie costs $7.00. C) if the baseball game costs $10.00 and the movie costs $5.00. D) Both answers B and C are correct.
Franco's Frozen Ice produces Italian flavored ice that is sold in the freezer section of grocery stores. Currently, Franco's does not have a fixed advertising budget and advertises in grocery stores' weekly advertising flyers and on the radio. A unit of advertising in the weekly flyers costs $1,500 and a unit of advertising on the radio costs $4,500. At their current advertising levels, the
marginal benefit of advertising in the flyer is $1,750 and the marginal benefit of advertising on the radio is $5,000. Which of the following is true? A) To maximize profits, Franco's should increase the amount of advertising in flyers and on the radio. B) To maximize profits, Franco's should increase the amount of advertising in flyers, but not change the amount of advertising on the radio. C) Franco's is currently maximizing its profits from advertising. D) To maximize profits, Franco's should decrease the amount of advertising in flyers and on the radio.
Abstraction is used in economics to omit unnecessary details and focus on the essence of the problem being studied
a. True b. False Indicate whether the statement is true or false
If Mr. Smith thinks the last dollar spent on shirts yields less satisfaction than the last dollar spent on cola, and Mr. Smith is a utility-maximizing consumer, he should:
A. decrease his spending on cola. B. decrease his spending on cola and increase his spending on shirts. C. increase his spending on shirts. D. increase his spending on cola and decrease his spending on shirts.