Explain the principle "Make the poorest as well off as possible." Who proposed it?
What will be an ideal response?
This principle was proposed by John Rawls. According to this principle, taking all the costs of income transfer into account, the fair distribution of the economic pie is one that makes the poorest person as well off as possible. The incomes of rich people should be taxed, and after paying the costs of administering the tax and transfer system, what is left should be transferred to the poor. But the taxes must not be so high that they make the economic pie shrink to the point at which the poorest person ends up with a smaller piece. The goal is to make the piece enjoyed by the poorest person as big as possible.
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Clooney Brothers Inc sells wheat in a perfectly competitive market where the market price is $5.28 per bushel. It produces 250 bushels of wheat per month and has an average total cost of production of $3.50 . Which of the following is true in this scenario? a. The firm will break even
b. The firm will earn a profit of $445. c. The firm will suffer a loss of $600 and decide to shut down. d. The firm will suffer a loss of $200 and decide to stay open.
This graph demonstrates the domestic demand and supply for a good, as well as the world price for that good.
According to the graph shown, if this economy were to open to trade, the amount consumed domestically would:
A. decrease by 40. B. increase by 40. C. increase by 35. D. increase by 75.
The slope of the aggregate supply curve is
A. perfectly vertical. B. perfectly horizontal. C. upward. D. downward.
A perfectly inelastic demand would imply what kind of demand curve?
A) horizontal B) vertical C) upward sloping D) downward sloping