Which of the following is NOT correct regarding the theories of income distribution?
A. Dealing with how income ought to be distributed is a normative issue.
B. The egalitarian principle of income distribution is "to each exactly the same."
C. The productivity standard for the distribution of income is stated "to each according to what they produce."
D. Dealing with how income should be distributed is a positive economic issue.
Answer: D
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The optimal subsidy for private giving to a public good increases as the number of people benefiting from the public good increases.
Answer the following statement true (T) or false (F)
Everything else remaining unchanged, if a new seller enters a market to compete with an existing monopoly that is enjoying economies of scale, it will lead to:
A) higher profits for both firms. B) higher profits for the existing firm. C) lower profits for the existing firm. D) higher market power for the existing firm.
If the interest rate on saving is 5 percent per period, then the true opportunity cost of being paid $100 next period instead of this period is
a. $5. b. $105. c. less than $5 if people suffer from a "defective telescopic faculty." d. more than $5 if people suffer from a "defective telescopic faculty."
When the MPP of labor is zero, ceteris paribus,
A. Additional units of labor must be employed because other factors of production are being wasted. B. No further increases in output can be achieved by using additional units of labor. C. Employment can be increased only by offering a higher wage rate. D. MRP is at a maximum.