How is the principle of diminishing marginal utility used to justify income redistribution?
The argument proposes that as income rises, the happiness associated with that income also rises, but by diminishing amounts. The decrease in utility that results from taking income from high-income groups may be less than the increase in utility generated by giving this income to low-income groups. The total utility in society would be enhanced by such redistribution if people have similar preferences for income. The exact utility income relationship is impossible to state, however, because of our inability to measure utility precisely or to make utility comparisons across individuals.
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Why, in the U.S., do professional soccer players command a far lower salary than professional baseball players?
A) Soccer is in much less demand. B) Soccer costs less to manage and perform compared to baseball. C) Soccer has yet to mature. D) The baseball players prefer lobbied to keep soccer salaries low.
As long as an economic profit is available, a perfectly competitive market will continue to attract new entrants.
Answer the following statement true (T) or false (F)
Joe deposits $200 in currency into his checking account at a bank. This deposit is treated as
A. an addition of $200 to the money supply because the bank holds $200 in currency and the checking account has been increased by $200. B. an addition of $200 to the money supply because of the creation of a checkable deposit of $200. C. a subtraction of $200 from the money supply because the $200 in currency is no longer in circulation. D. no change in the money supply because the $200 in currency has been converted to a $200 increase in checkable deposits.
As it relates to the R&D decision, the interest-rate cost-of-funds curve:
A. usually slopes downward. B. is the marginal cost element in the MB = MC decision framework. C. indicates a constant rate of return, r. D. reflects the interest rate on bank loans but not the implicit interest rate on the use of retained earnings.