Which of the statements below is primarily normative in nature?
A. The inequality of income that exists in the United States is partly caused by an unequal distribution of wealth.
B. There is an unequal distribution of income in the United States.
C. The distribution of income is more unequal in the United States than it is in Japan.
D. The distribution of income in the United States should be more equal than it is.
Answer: D
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In perfect competition, environmental externalities need not distort the allocation of resources providing:
a. transactions costs are zero. b. average costs are constant for all output levels. c. firms install pollution control equipment. d. the government sets realistic pollution standards.