As Pointed Out by the 'Big Tradeoff', Government Action That
As pointed out by the 'big tradeoff', government action that redistributes incomes so that everyone has the same income leads to
A) efficient markets.
B) lower taxes on the rich than on the poor so that the rich do not lose their incentive to work.
C) resources being allocated according to a command system.
D) a smaller total output.
E) fairness according to the 'fair rules' approach.
Why does redistribution, so that the distribution of income is equal, bring about less total output?
A) No one can determine marginal benefit or marginal cost as a result.
B) Because the marginal benefit and marginal cost of work have been equally increased.
C) The premise of the question is incorrect because an equal distribution of income would increase rather than decrease the total amount produced.
D) Those in political power will likely receive a larger income.
E) Incentives to work are reduced.
If the government takes over the distribution of some scarce good in a time of a natural disaster and provides the good at no charge to users, what must also be done?
A) Because we live in a democracy, the government must use majority rule as the rationing mechanism.
B) The government must produce the good itself.
D) Some rationing mechanism must be set up to determine who gets the good.
E) Everyone hurt in the natural disaster must get one of the goods.
The idea that unequal incomes are unfair generally uses the ________ principle of fairness.
A) it's not fair if the rules aren't fair
B) involuntary exchange
C) voluntary exchange
D) big tradeoff
E) it's not fair if the result isn't fair