What are the two views of fairness? How does each view redistribution of income from the rich to the poor?
What will be an ideal response?
One view is that "it's not fair if the result isn't fair." This view requires that income should be redistributed from the rich to the poor in order to create a fair result. Another view is that "it's not fair if the rules aren't fair." This view requires that private property may be transferred only under voluntary exchange, so redistribution of income is not fair unless it is voluntary.
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In analyzing the decision to shut down in the short run we assume that the firm's fixed costs are
A) nonmonetary opportunity costs. B) sunk costs. C) implicit costs. D) capital costs.
Which of the following is not an argument by those who oppose tax-law changes to encourage saving?
a. Saving is not very responsive to changes in the tax rate. b. Saving is not an important determinant of a nation's ability to produce output. c. Reducing the budget deficit instead of changing the tax laws could raise saving. d. Changes in the tax laws to induce saving would distribute the tax burden less fairly.