Regarding income distribution and the distribution of wealth
A) wealth is a stock concept and income a flow concept.
B) a stock is evaluated at a given moment in time; a flow is evaluated during a period of time.
C) income, a flow, can be viewed as a return on wealth.
D) All of the above are correct.
D
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Suppose Tammy grew up on a farm and is very good at plowing. In addition suppose she is a popular country singer who earns $4,000 per performance. If her husband Bob can plow (but not as well as Tammy) but he can't carry a tune, then it would be most efficient if
a. Tammy did both the plowing and the singing. b. Tammy specialized in plowing and Bob in singing. c. Bob did both the plowing and singing. d. Tammy specialized in singing and Bob in plowing. e. They both plowed and sang.
Refer to the following graph.
This set of cost curves is:
A. wrong because the average total cost and marginal cost curves are switched. B. correct. C. wrong because the average total cost and average variable cost curves are reversed. D. wrong because the AFC should always be downward-sloping.
Many people donate to charity and leave tips to servers in restaurants even when they will never visit the restaurant again. Economists consider this type of behavior to be
a. irrational because these actions make people worse off financially. b. rational because it shows that people value fairness even when this behavior makes people worse off financially. c. rational only if other people observe this behavior. d. All of the above are consistent with the general view of fairness
One reason the Medicare system costs so much is
A. the supply of medical services does not respond to price changes. B. the amount of medical services is determined by the equilibrium of supply and demand. C. supply and demand analysis does not apply. D. beneficiaries are entitled to receive services for which the per-unit cost exceeds their own personal out-of-pocket payment.