Ms. Spring currently earns $100,000 a year, while her junior partner, Mr. Fall, earns $55,000 a year. From the perspective of a utilitarian, if both of their incomes are subject to diminishing marginal utility, taking a dollar from Ms. Spring and giving it to Mr. Fall will
a. increase society's total utility.
b. lower Ms. Spring's marginal utility of income.
c. increase Mr. Fall's marginal utility of income.
d. lower society's total utility.
a
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Which of the following contributes to economic growth?
A) increase in environmental protection policies B) increase in labor regulations restricting the hours of overtime allowed C) increase in labor productivity D) increase in consumer spending
Assuming that the rational expectations hypothesis is NOT in effect, in the short run an expansionary monetary policy should
A) generate stagflation. B) shift the aggregate supply function. C) increase real Gross Domestic Product (GDP) and the price level. D) increase the rate of unemployment.
What is meant by the phrase, "There is no such thing as a free lunch"?
What will be an ideal response?
Refer to Figure 8.1. Holding other variables constant, a decrease in the capital stock will result in a
A) shift from curve D1 to curve D2. B) shift from curve D2 to curve D1. C) movement from point A to point B. D) movement from point B to point A.