In a world where people would have no prior information about where they are in an income distribution, given the choice, Rawls argues that they would prefer
a. an income distribution that is relatively equal
b. that everyone has the same work opportunities and then let incomes be what the market generates
c. to rely on their abilities so accept high levels of income inequality
d. that private property be transformed to government property to safeguard their incomes
e. less economic assistance to the poor because it distorts the price system
A
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If the Federal Reserve wanted to change the money supply in the economy, it would be least likely to
A) change the federal funds rate. B) sell bonds on the open market. C) change the level of reserves required to be held by banks. D) buy bonds on the open market.
Just as resources are scarce for the individual,
a. they are also scarce for the economy as a whole b. they are never scarce for the economy as a whole c. they are randomly abundant for other individuals d. there will be zero resources available for the economy as a whole e. the economy a whole is never faced with having to make rational choices about using resources
Demand for a good becomes more elastic as:
a. the number of substitutes available declines. b. the time period under consideration becomes shorter. c. a good makes up a larger percentage of a consumer's budget. d. a good makes up a smaller percentage of a consumer's budget. e. the producer has more time to respond to price changes.
If the construction of a new elementary school would create $5 million worth of benefits for citizens and cost $7 million to construct, then using the criterion of economic efficiency, the school
a. should be built. b. should not be built. c. results in a substantial improvement to the welfare of society. d. should be built if it passes by a majority vote.