One of the problems associated with the utilitarianism is that it does not recognize that
A) taxing those with higher incomes results in less work effort.
B) each individual receives a different marginal benefit from a dollar's worth of income.
C) equity is achieved when there is no poor and no rich.
D) similar individuals should be treated the same.
Ques. 2In the above figure, using the slope across an arc, the slope of the curve between points a and b is
A) 1/2.
B) -1/2.
C) 2.
D) -2.
Ques. 3Marylou, whose utility of wealth curve is shown in the figure above, faces two options. Option A yields 200 for sure. Option B has a 0.3 probability of yielding 100, and a 0.7 probability of yielding 300. Marylou, who is
A) picks option A.
B) picks option B.
C) is indifferent between option A and option B.
D) needs more information to make a choice.
Ques. 4Fluctuations in aggregate demand and aggregate supply explain why real GDP fluctuates.
Indicate whether the statement is true or false
Ques. 5In the foreign exchange market, a decrease in the exchange rate increases the quantity of dollars supplied.
Indicate whether the statement is true or false
Ques. 6A contestable market is one in which
A) one dominant firm sets the market price, and all other firms are price takers.
B) if a firm cuts its price, all other firms will follow the price cut.
C) one or a small number of firms operate, but faces competition from potential entrants.
D) a group of firms enter into an agreement to restrict output and raise prices.
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