As pointed out by the "big tradeoff," government action that redistributes incomes so that everyone has the same income leads to
A) fairness according to the "fair rules" approach.
B) efficient markets.
C) resources being allocated according to a command system.
D) a smaller total output.
E) lower taxes on the rich than on the poor so that the rich do not lose their incentive to work.
D
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Which of the following statements is NOT a function of the Fed?
A) It ensures that commercial banks report their assets and liabilities with accuracy. B) It monitors the stockholders' equity of commercial banks. C) It oversees interbank payment systems. D) It regulates the various stock markets in the economy.
Which of the following factors helps explain limitations of concentration measures?
A) data collection challenges B) failure of the market and industry to correspond C) poor public information about firms D) lack of staff to perform professional market research
What happens when the bond holder sells a bond after a price drop and before earning the full principal?
The owner of Tie-Dyed T-shirts, a perfectly competitive firm, has hired you to give him some economic advice. He has told you that the market price for his shirts is $20 and that he is currently producing 200 shirts at an AVC of $15 and an ATC of $25. What would you recommend to him?
A. To shut down in the short run, as he is incurring a loss, and to leave the industry in the long run, if there are no changes in economic conditions. B. To continue producing in the short run, as his loss from production is less than his fixed costs, but to exit the industry in the long run if there are no changes in economic conditions. C. To continue to produce in the short run, even though he is earning a loss, and to expand in the future with the hope of increasing market share and total revenue. D. You tell him you cannot make any recommendations until you know what his fixed costs are.