Some advocates of antipoverty programs claim that fighting poverty is a public good. Describe why government intervention may be necessary to reduce poverty
Eliminating poverty is not a good that the private market can provide. No single individual can solve the problem of poverty, and those who do not donate to charity can free-ride on the generosity of others. If we all prefer to live in a society without poverty, taxing the wealthy to raise the living standards of the poor may be able to make everyone better off.
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A variable factor of production:
A. is fixed in the long run but variable in the short run. B. is variable in both the short run and the long run. C. plays no role in the law of diminishing marginal returns. D. is variable only in the short run.
Advocates of competitiveness as a argument for trade protection
a) apply an adversarial business model to international trade b) confuse economic growth with comparative advantage c) favor protection of capital-intensive industries d) fail to appreciate the role of industrial restructuring e) all of the above
Answer the following statement true (T) or false (F)
1) In the long run, monopolistically competitive firms make normal profits because they are forced to operate at the minimum point on their average total cost curve. 2) The monopolistically competitive seller maximizes profits by equating price and marginal cost. 3) Monopolistically competitive firms are inefficient because they produce at a point on the rising segment of their average cost curves. 4) The demand curve of a monopolistically competitive producer is less elastic than that of a purely competitive producer.
If the CPI was 132.5 at the end of last year and 137.5 at the end of this year, the inflation rate over these two years was
A) 3.6 percent. B) 3.8 percent. C) 5.0 percent. D) None of the above answers is correct.