31.Alikelyeffectofgovernmentpoliciesthatredistributeincomeandwealthfromthewealthytothepooristhatthosepolicies
a.enhanceequality.
b.enhanceefficiency.
c.increasetherewardforworkinghard.
d.Alloftheabovearecorrect.
32.Governmentpoliciesdesignedtoequalizethedistributionofeconomicwell-beinginclude
(i)thewelfaresystem
(ii)unemploymentinsurance
(iii)progressiveincometax
a.(i)only
b.(ii)only
c.(i)and(ii)only
d.(i),(ii),and(iii)
33.Governmentpoliciesresultinginreducedefficiencyinclude
(i)thewelfaresystem
(ii)unemploymentinsurance
(iii)progressiveincometax
a.(i)only
b.(ii)only
c.(i)and(ii)only
d.(i),(ii),and(iii)
34.Whengovernmentpoliciesareenacted,
a.equalitycanusuallybeenhancedwithoutanefficiencyloss,butefficiencycanneverbeenhancedwithoutareductioninequality.
b.efficiencycanusuallybeenhancedwithoutareductioninequality,butequalitycanneverbeenhancedwithoutanefficiencyloss.
c.itisalwaysthecasethateitherefficiencyandequalityarebothenhanced,orefficiencyandequalityarebothdiminished.
d.Noneoftheabovearecorrect.
35.SenatorBrownwantstoincreasetaxesonpeoplewithhighincomesandusethemoneytohelpthepoor.SenatorJohnsonarguesthatsuchataxwilldiscouragesuccessfulpeoplefromworkingandwillthereforemakesocietyworseoff.Aneconomistwouldsaythat
a.weshouldagreewithSenatorBrown.
b.weshouldagreewithSenatorJohnson.
c.agooddecisionrequiresthatwerecognizebothviewpoints.
d.therearenotradeoffsbetweenequityandefficiency.
36.Acertainstatelegislatureisconsideringanincreaseinthestategasolinetax.RepresentativeCampbellarguesthatanincreaseinthegasolinetaxwouldharmlow-incomedriversdisproportionately.RepresentativeRichardsrespondsbysayingthatlow-incomedriversownsmallercarsthatuselessgasoline,andthatlow-incomedriversthereforewouldnotbeharmeddisproportionately.
a.RepresentativeCampbell’sargumentisbasedprimarilyonefficiency,whileRepresentativeRichards’argumentisbasedprimarilyonequality.
b.RepresentativeCampbell’sargumentisbasedprimarilyonequality,whileRepresentativeRichards’argumentisbasedprimarilyonefficiency.
c.Bothrepresentatives’argumentsarebasedprimarilyonefficiency.
d.Bothrepresentatives’argumentsarebasedprimarilyonequality.
37.SenatorJacksonarguesthatreplacingthefederalincometaxwithanationalsalestaxwouldincreasethelevelofoutput.SenatorFeldmanobjectsthatthispolicywouldbenefittherichattheexpenseofthepoor.
a.Bothsenators’argumentsareprimarilyaboutequality.
b.Bothsenators’argumentsareprimarilyaboutefficiency.
c.SenatorJackson’sargumentisprimarilyaboutequality,whileSenatorFeldman’sargumentisprimarilyaboutefficiency.
d.SenatorJackson’sargumentisprimarilyaboutefficiency,whileSenatorFeldman’sargumentisprimarilyaboutequality.
38.Supposethegovernmenttaxesthewealthyatahigherratethanittaxesthepoorandthendevelopsprogramstoredistributethetaxrevenuefromthewealthytothepoor.Thisredistributionofwealth
a.ismoreefficientandmoreequalforsociety.
b.ismoreefficientbutlessequalforsociety.
c.ismoreequalbutlessefficientforsociety.
d.islessequalandlessefficientforsociety.
39.Thegovernmenthasjustpassedalawrequiringthatallresidentsearnthesameannualincomeregardlessofworkeffort.Thislawislikelyto
a.increaseefficiencyandincreaseequality.
b.increaseefficiencybutdecreaseequality.
c.decreaseefficiencybutincreaseequality.
d.decreaseefficiencyanddecreaseequality.
40.Theopportunitycostofanitemis
a.thenumberofhoursneededtoearnmoneytobuytheitem.
b.whatyougiveuptogetthatitem.
c.usuallylessthanthedollarvalueoftheitem.
d.thedollarvalueoftheitem.
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