The basic argument for income inequality is that:
A. the very rich establish consumption patterns that are desirable for the rest of society to
emulate.
B. the rich buy luxury goods that soon become affordable to everyone else because of
economies of scale.
C. income inequality is essential to maintain incentives to produce.
D. inequality undermines incentives and tends to reduce the size of the national income.
Answer: C
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On average, people in the United States spend a greater percentage of their income on health care than do people in most other countries
Indicate whether the statement is true or false
Which of the following is a social insurance program?
a. Medicaid b. food stamps c. unemployment compensation d. Temporary Assistance for Needy Families e. general assistance
Ellie has been working for an engineering firm and earning an annual salary of $80,000 . She decides to open her own engineering business. Her annual expenses will include $15,000 for office rent, $3,000 for equipment rental, $1,000 for supplies, $1,200 for utilities, and a $35,000 salary for a secretary/bookkeeper. Ellie will cover her start-up expenses by cashing in a $20,000 certificate of
deposit on which she was earning annual interest of $500 . According to Ellie's accountant, which of the following revenue totals will yield her business $50,000 in profits? a. $55,200 b. $105,200 c. $132,500 d. $185,700
The private marginal benefit for commodity X is given by 15 - X, where X is the number of units consumed. The private marginal cost of producing X is constant at 10. In the absence of any government intervention, how much X is produced? What is the gain to society involved in moving from the inefficient to the efficient level of production?
What will be an ideal response?