A utilitarian government must
a. calculate the utility of each individual in society.
b. avoid enacting any policies that redistribute income from the rich to the poor.
c. balance the gains from greater equality against the losses from distorted incentives.
d. pursue policies that do not affect the middle class.
c
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A the beginning of 2012, you pay $100 for a share of stock that then pays you a dividend of $1 at the beginning of 2013. If the stock price rises from $100 to $109 per share over the year, then you have earned an annual rate of return of
A) 5 percent. B) 1 percent. C) 9 percent. D) 4 percent. E) 10 percent.
Central banks intervene in the foreign exchange market
A) to smooth out currency fluctuations. B) to facilitate the transfer of goods and services internationally. C) to conduct foreign exchange operations for central governments. D) All of the above.
At each round of the multiplier process, increases in income:
a. leak out of the expenditures stream in the form of investment and taxes. b. leak out of the expenditures stream in the form of saving and imports. c. are matched by a smaller increase in expenditures. d. result in even greater increases in expenditures due to investment and exports. e. result in no change in total expenditures.
The kinked demand curve explains
A. How an oligopoly can achieve monopoly profits. B. The consequences of the interdependent behavior of oligopolists. C. Why oligopolists are more sensitive to cost changes than are competitive markets. D. Price-fixing along the elastic part of the demand curve and predatory pricing on the inelastic portion.