What is the Haig-Simons definition of income? Are there any practical problems in implementing the Haig-Simons definition?
What will be an ideal response?
The Haig-Simons definition of income is the dollar value of the maximum amount that one can consume over a given period of time without reducing the value of one's wealth. There are some practical problems in implementing it. First, it is not always clear what the value of an asset is until it is sold in a market. Second, if implemented fully, someone might have to sell an asset in order to pay the taxes due on the asset. This might be considered to be unfair on equity grounds.
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The basic activity of a firm is
A) to set the prices of its products as high as possible. B) to compete with other firms that produce similar products. C) to provide jobs for its employees. D) to use inputs to produce outputs of goods and services.
Suppose you are thinking about spending an additional hour studying for your next microeconomics exam. You should spend that extra hour studying as long as
A. the extra study time leads to a higher grade on the exam. B. your only other alternative is spending an hour reading a novel. C. the benefit of an additional hour of study is greater than what you have to give up in order to study one more hour. D. you enjoy studying microeconomics.