Which of the following is an efficiency argument against the welfare state?
a. High marginal tax rates create large disincentives to work and lower overall production.
b. It is fairer to tax those with higher incomes than those with lower incomes.
c. The government has no right to force those with higher incomes to pay more taxes than those with lower incomes.
d. Principles of social justice argue that society should take care of the poor.
Ans: a. High marginal tax rates create large disincentives to work and lower overall production.
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If all goods are essential, a consumer will optimize at an interior solution.
Answer the following statement true (T) or false (F)
In the above figure, 300,000 purses per month is
A) the efficient amount to produce because at 300,000 purses marginal social benefit equals marginal social cost. B) the efficient amount to produce because at 300,000 purses marginal social benefit is greater than marginal social cost. C) an inefficient amount to produce because at 300,000 purses marginal social benefit equals marginal social cost. D) an inefficient amount to produce because producing 500,000 purses sets the marginal social benefit equal to zero.
Which of the following would show a good that is relatively elastic in supply?
a. ES รท1 b. ES = 1 c. ES ? 1 d. ES < 1
When the average total cost is at its minimum, it is
A. greater than MC. B. equal to MC. C. smaller than MC.