23. The concept of diminishing marginal utility of income can support redistribu

Question

23. The concept of diminishing marginal utility of income can support redistribution of income to make the distribution of income more equal. This concept says that: a) lower income individuals have less overall satisfaction than higher income individuals. b) higher income individuals have less overall satisfaction than lower income individuals. c) the additional satisfaction from having more income is less for low-income individuals than higher income individuals lower income individuals. 24. Government policy responses to negative extermalities in a market are: d) the additional satisfaction from having more income is less for high-income individuals than a) higher taxes and restrictive regulation. b) higher taxes and mandates to increase use of the product. c) subsidies and mandates to increase use of the product d) subsidies and restrictive regulation. 25. Refer to the supply and demand graph to the right. In the graph, Sp is the supply curve based on the costs to the producer, and Ss is the demand curve based on total or social costs The socially optimal quantity of production and consumption of the good or service would be: G a) 0A b) 0B c) oc d) 0G The distribution of wealth in the United States is: a) less equal than the distribution of income. b) more equal than the distribution of income. c) about the same as the distribution of income d) depends on the measure of wealth and income used for comparison. 26. 27. Supporters of a higher minimum wage could argue that this would not involve higher unemployment by referring to: a) a supply and demand model of the labor market. b) studies of fast food restaurants that show no change in employment with higher minimum wages. c) both the supply and demand model of the labor market and studies of fast food restaurants that show no change in employment with higher minimum wages. d) the US. constitution. 28. The theory of human capital best explains the difference in earnings of a) men and women. b) blacks and whites. c) college graduates and high-school drop-outs. d) auto workers and garment workers.

Explanation / Answer

23) Ans) d

24)Ans)a

25)Ans)b

26)Ans)a

27)Ans)a

28)ans)c

Reason- As stock of knowlegde is more in case of colledge graduates.

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