Those who advocate the marginal productivity theory of income distribution argue that:
A. Government policy should be used to redistribute income based on need
B. Family income should be based on a family's demand for products
C. Resource markets will set incomes based on workers' contributions to the output of scarce goods and services
D. Monopoly and monopsony power do not affect resource payments of the overall distribution of income
C. Resource markets will set incomes based on workers' contributions to the output of scarce goods and services
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A microeconomic model CANNOT be used to
A) evaluate the impact of a price change on a firm's revenue. B) predict the impact on a rise of the minimum wage on unemployment. C) evaluate the fairness of the proposal to nationalize health insurance. D) evaluate the effect of an increase in stadium size on the price of a sport team's tickets.
Suppose the Canadian government's budget is G = $200 and T = $100 while the U.S. government's budget is G = $800 and T = $800 . We can conclude that
a. Canada has a deficit budget while the U.S. has a balanced budget and the Canadian budget is more expansionary than the U.S.'s b. both budgets are balanced and the balanced budget multiplier in Canada is 0.5 while in the U.S. it is 0.8 c. Canada has a surplus budget while the U.S. has a balanced budget and the Canadian budget is more expansionary than the U.S.'s d. Canada has a deficit budget while the U.S. has a balanced budget and the Canadian budget is less expansionary than the U.S.'s e. Canada has a surplus budget while the U.S. has a balanced budget and the Canadian budget is less expansionary than the U.S.'s
What happens when two countries apply tariffs against each other in an attempt to capture their terms-of-trade gain?
a. Both countries lose because the terms-of-trade gain for one country is canceled by the tariff in the other country. b. Both countries gain because the terms-of-trade gain for one country is canceled by the tariff in the other country. c. Neither country gains nor loses because the terms-of-trade gain for one country is canceled by the tariff in the other country. d. The country initially applying the tariff gains because it captures the terms-of-trade gain; the other country neither gains nor loses.
When unions raise wages beyond what productivity increases would permit,
A) more union workers are employed. B) there are higher wages for all union members. C) there is a redistribution of income from low- to high-seniority workers. D) nonunion workers wages in the economy also increase.