Compare and contrast the two normative standards to income distribution discussed in the text: The productivity standard and the egalitarian principle
What will be an ideal response?
The productivity standard is also called the contributive standard or the merit standard. People are rewarded according to merit, where merit is determined by one's ability to produce what is considered useful by society. The egalitarian principle would distribute income equally. The two principles are very different since the former will generate an unequal distribution of income and the latter an equal distribution of income. They also differ greatly in incentive structure. The egalitarian principle provides no incentives for doing work that is unpleasant or for bearing risk.
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The difference between the economic and political functions of government is that
A) the economic function is concerned with the Federal Taxation system while the political function is not. B) the economic function is concerned with correcting for market failures while the political function is not. C) the economic function is concerned with the reallocation of income while the political function is not. D) the economic function encourages merit goods while the political function discourages demerit goods.
Barbara is a retailer of propane and propane accessories. As she designs her store layout for the new season, she recalls that a tax has just been removed from propane and propane products. If her store reflects the overall market, how should this knowledge influence her design?
a. She should make the propane area larger because more propane will be sold. b. She should leave the propane area the same size because the same amount of propane will be sold. c. She should make the propane area smaller because less propane will be sold. d. She should close the propane area until a new tax is added to propane.
The price ______ of demand measures the responsiveness of quantity demanded to a change in price.
a. unit b. slope c. curve d. elasticity
If you look for a job for eighteen months after graduation, but fail to generate an offer, even after lowering your expectations, the economy is probably in the business cycle phase called a:
A. recession. B. peak. C. boom. D. recovery.