Explain the following statement by Arthur Okun: "Insistence on carving the pie into equal slices would shrink the size of the pie. This fact poses the trade-off between economic equality and economic efficiency."
What will be an ideal response?
An effort to equalize income shares through taxation would result in less income for all to share because of the negative impact of high taxes on work effort.
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Answer the following statement(s) true (T) or false (F)
1. Diminishing marginal returns is basically the same concept as decreasing returns to scale.. 2. The unit isoquant represents all possible ways of producing one unit. 3. If the wage and rental rates are $10 and $50 per hour respectively and an additional worker could produce 100 units of output in an hour, then an extra unit of capital could produce 500 units of output in an hour. 4. If the marginal product of labor is currently 40 units per hour and the marginal product of capital is currently 20 units per hour, then workers must be getting paid twice as much as capital per hour. 5. If all inputs are variable in the long run, then there cannot be decreasing returns to scale. But if some inputs remain fixed in the long run, then decreasing returns to scale can occur.
Managers of profit centers earn more when their divisions
a. increase their sales and increase their costs b. decrease their sales and increase their costs c. decrease the costs of the components for which they are responsible d. increase the costs of the components for which they are responsible
Economic growth may be represented by a(n):
a. leftward shift of a production possibilities curve. b. outward shift of a production possibilities curve. c. movement along a production possibilities curve. d. production possibilities curve that remains fixed.
Why are check able deposits counted as part of a nation’s money supply?
What will be an ideal response?