Social welfare functions can be formed in many ways. They can be additive, meaning that the all utilities curves are added together. They incorporate the idea of least-best, meaning that the utility of the person with the least is maximized. If you were a central planner for an economy, what type of social welfare function would you create?
What will be an ideal response?
Answers will vary, but generally you need a social welfare function that incorporates some
collectively agreed upon notion of fairness. It must also be function that can be implemented without causing undue stress on citizens or the economy.
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Taxes reduce total spending
a. directly by increasing government purchases by an equal amount. b. directly by substituting investment spending. c. indirectly by reducing government spending. d. indirectly by reducing disposable income.
From 1992, America’s trade performance was marked by a(n)
A. reduced current account deficit. B. increased current account deficit. C. reduced capital account surplus. D. increase in the growth of exports.
Suppose Winston's annual salary as an accountant is $60,000, and his financial assets generate $4,000 per year in interest. One day, after deciding to be his own boss, he quits his job and uses his financial assets to establish a consulting business, which he runs out of his home. To run the business, he outlays $8,000 in cash to cover all the costs involved with running the business, and earns revenues of $150,000. What are Winston's accounting profits?
A. $150,000 B. $138,000 C. $142,000 D. $78,000
What did Adam Smith perceive was primarily responsible for improving standard of living?
What will be an ideal response?