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Question 1 

Your textbook argues that the phrase "the distribution of income" is misleading because
A) income is not created in a market economy, only wealth is.
B) it suggests that income is not earned in process of its creation and can simply be parceled out any which way policymakers wish.
C) income in the form of wages and salaries can be negative, and therefore cannot be distributed.
D) it is only related to ethical rather than economic considerations.

Answer

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Question 2 

Cooperation among people in an urban, industrialized society
A) becomes more difficult as transaction costs increase.
B) is dependent upon people having a detailed, specific knowledge of the wants and abilities of others.
C) is impossible once the number increases beyond a few thousand.
D) requires coordination by central-planning committees.
E) will not occur unless most people approve of the goals and values of others.

Answer

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