Explain the trade-off between equity and economic efficiency inherent in the welfare system.
What will be an ideal response?
Equity is improved when the income of the poor is increased by welfare benefits. However, economic efficiency is reduced by the transfers because welfare benefits discourage work effort and human capital development.
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Shama is producing candles in a perfectly competitive market. When she produces 500 candles, her total cost is $250. If she produces one additional candle, her total cost increases to $260
In order to maximize her profit, she should produce the additional candle A) if the market price for a candle is $12. B) only if the market price exceeds $260 for a candle. C) only if the market price exceeds $250 for a candle. D) if the market price for a candle exceeds $0.50. E) if her price exceeds her average total cost.
There are many ways developing countries finance their external deficits EXCEPT
A) bank finance. B) portfolio investment in ownership of firms. C) bond finance. D) official lending. E) foreign exchange rates.
If a pair-wise majority vote was held and the voters' preferences are in the given table, which option would win the first round of voting?
A. Public transportation
B. Public zoo
C. Public parks
D. It depends on which pair was considered first.
The M form organization says China's success is due to:
a. central planning b. state capitalism c. regional competition d. the Hukuo system e. none of the above