Social preferences chosen from behind the veil of ignorance are likely to value efficient outcomes and are likely to treat individuals symmetrically. ?
Answer the following statement true (T) or false (F)
True
Rationale: The key to this method is the choice of an ethical criterion without knowing what position in society we will actually occupy. John Rawls argued that using this method, we will desire a society that maximizes the welfare of the least well off individual.
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Consumers who are more sensitive to changes in price suffer a greater loss of consumer surplus from any given price increase
Indicate whether the statement is true or false
Suppose you purchased 100 shares of stock in 2010 for $25 a share and you sell them today for $50 a share. If the capital gains tax is 28 percent, your tax liability is
A) $70. B) $700. C) $2500. D) indeterminate without knowing the inflation rate.
All of the following are true regarding moral hazard except which one?
A) It arises when parties to a transaction have conflicting objectives and the supervising parties cannot monitor the other parties. B) It typically occurs after participants have already entered into a contract or agreement. C) It is a situation in which individuals make hidden actions that benefit them at the expense of the other parties. D) Situations of moral hazard tend to be rare occurrences.
Which of the following might be an example of an economic argument against advertising?
a. It causes the demand for the good to be more elastic b. It allows the producer to earn an economic profit in the long run c. People may be deluded into thinking that a good with a brand name is better than an otherwise identical generic brand d. The claims made in the ads are almost always false