Adam makes $25,000 per year and Bob makes $45,000 a year, and they both have the same marginal benefit curve. According to the utilitarian view, if a dollar is transferred from Bob to Adam, then
A) the change in Adam's marginal benefit plus the change in Bob's marginal benefit is negative.
B) Adam's marginal benefit increases by more than Bob's marginal benefit decreases.
C) the change in Adam's marginal benefit plus the change in Bob's marginal benefit equals zero.
D) Adam's marginal benefit decreases by more than Bob's marginal benefit increases.
B
You might also like to view...
An option that gives the owner the right to buy a financial instrument at the exercise price within a specified period of time is a
A) call option. B) put option. C) American option. D) European option.
What is the argument against the use of autonomous tightening of monetary policy in response to a credit-driven asset-price bubble?
What will be an ideal response?
When a per unit tax is imposed on the sale of a product of a monopolist, the resulting price increase will
A) always be less than the tax. B) always be more than the tax. C) always be less than if a similar tax were imposed on firms in a competitive market. D) not always be less than the tax.
What is one implication of the real-balance effect?
A) The part of your wealth that you hold in the form of cash loses some of its value as the price level rises. B) When the price level rises, people have an incentive to work harder in order to earn a higher income. C) When the price level falls, most consumers reallocate their spending so as to have an equal balance between necessities and luxuries. D) Aggregate demand and aggregate supply can never reach long-run equilibrium.