Provide a utilitarian justification for using the tax system to provide a more equal distribution of income as well as two possible counterarguments to this viewpoint
What will be an ideal response?
A utilitarian justification for a more equal distribution of income is embodied in the notion of a social welfare function. Implicitly this notion weighs the well-being of some individuals against others, with the idea that redistribution can increase social welfare by shifting income from individuals where the income will have a lesser impact on the social welfare function to those individuals where it will have a higher impact. One counterargument to this viewpoint is that those being forced to give up income through taxation are being unfairly coerced. The second counterargument is that inequality is frequently the result of higher productivity and thus is justified, regardless of the whether or not "social welfare" is maximized.
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The magnitude of the annual overstatement of the CPI is approximately
A. one percentage point. B. one-tenth of one percentage point. C. one-half of one percentage point. D. five percentage points.
If a country's working-age population increases and its wealth increases, then the labor supply curve
A. shifts to the right. B. shifts to the right if the effect of the change in wealth is bigger than the effect of the change in the working-age population. C. shifts to the left if the effect of the change in wealth is bigger than the effect of the change in the working-age population. D. shifts to the left.
Define "autonomous consumption spending."
What will be an ideal response?
Tom is stranded on a deserted island where he can only consume coconuts and crabs. Two of his indifference curves are in the figure above
a) Would Tom prefer his consumption to be at point a or at point b? At point b or at point c? Explain your answers. b) Between points a and b, what is Tom's marginal rate of substitution for a crab?