Assume the Nozick rules are being followed in the economy so that the distribution of income is fair. What must be true for this to create an efficient allocation of resources?
A) All people are earning equal incomes.
B) There are no public goods, monopolies, high transactions costs, or external costs and benefits.
C) The costs of administering redistribution equals the benefits the poor receive.
D) The government must redistribute income in a fashion that minimizes the "big tradeoff."
E) The government must allocate resources using a command mechanism.
B
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Government saving is equal to
A) net taxes. B) net taxes minus government expenditures. C) net taxes plus government expenditures. D) private savings minus government expenditures. E) the quantity of investment demanded.
In a small country, the adult population equals 5,000. There are 4,000 people in the labor force and 3,000 people are employed. The labor force participation rate equals
A) 25 percent. B) 80 percent. C) 30 percent. D) an undetermined amount given the lack of information.