Why Does Redistribution, So That the Distribution of Income Is
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.
When economists use the term 'big tradeoff' when discussing efficiency they are referring to the tradeoff between
A) deadweight loss and producer/consumer surplus.
B) marginal cost and marginal benefit.
C) producer surplus and consumer surplus.
D) efficiency and fairness.
E) external costs and external benefits.
Which of the following is part of the cost of income transfers?
A) Income transfers are a similar to allocating resources using a lottery.
B) Income transfers make the results more unfair.
C) Taxing incomes encourages people to work harder.
D) Income transfers increase the size of the economic pie.
E) Tax-collecting agencies cost money to administer.
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.