The marginal productivity theory of income distribution has been criticized because:
A. the resulting distribution of income is likely to be too equal to maintain production
incentives.
B. income from inherited property is inconsistent with the theory.
C. purely competitive conditions characterize most resource markets.
D. it fails to recognize that resource demand is derived from product demand.
Answer: B
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If the world price for good A is above the domestic price for good A without trade, then producer surplus will ________ and total economic surplus will ________ with trade.
A. increase; decrease B. decrease; increase C. increase; increase D. decrease; decrease
Limitations of bargaining include:
A. contracts may not need enforcing. B. property rights might be assigned in the wrong way. C. if the parties have too much information, bargaining may be unnecessary. D. None of these is correct.
When the Fed alters the types of assets it owns, it is engaging in
A) international balance management. B) forward guidance. C) quantitative easing. D) changing the discount rate.
The loanable funds market is in equilibrium in all of the following situations except
a. when borrowers' and savers' desires to borrow and lend at a given rate of interest are satisfied b. at the interest rate that equates the quantity supplied and the quantity demanded of loanable funds c. when the excess supply of funds is zero d. when the excess demand of funds is zero e. when the interest rate is increasing due to an excess demand