If social indifference curves are straight lines with slope of -1, the ethical standard for judging outcomes places all weight on the sum of outcomes and no weight on the distribution of outcomes.
Answer the following statement true (T) or false (F)
True
Rationale: Just like indifference curves for perfect substitutes, all we would care about is getting the "most".
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If the backward-bending supply curve for labor has relevance for public finance, it is because _____
a. at really high wage rates there will be insufficient labor to meet aggregate demand b. there is a trade-off between leisure and labor c. income taxes do no raise sufficient revenue to pay for public goods because individuals consume too much leisure d. taxpayers are not receiving as much utility from public sector output as they are losing through the income effect associated with income taxes
Suppose that U.S. incomes rise relative to British incomes. Then,
a. the dollar will appreciate and the pound will depreciate b. the dollar will depreciate and the pound will appreciate c. the dollar will depreciate and the pound's value will remain constant d. the dollar will appreciate and the pound's value will remain constant e. neither the dollar nor the pound will be affected
What effect does expansionary monetary policy have on short-term real interest rates?
a. Expansionary monetary policy tends to push short-term interest rates upward. b. Expansionary monetary policy tends to push short-term interest rates downward. c. The effect of expansionary monetary policy on short-term interest rates is unpredictable. d. Expansionary monetary policy has no effect on short-term interest rates.
When the absence of property rights causes a market failure, the government can potentially solve the problem
a. by clearly defining property rights. b. through regulation. c. by supplying the good itself. d. All of the above are correct.