If the marginal productivity of labor was the sole determinant of household income in the U.S., then
a. no households would be poor according to the official government definition of poverty
b. no households would be poor according to a relative definition of poverty
c. the distribution of income would be unequal
d. every household would have sufficient income to meet biological needs
e. there would be no need for government programs to redistribute income
C
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From 2015 to 2016, the overall price level rose from 200 to 220. Over the same period, tuition rates at the local community college rose from $100 to $115 per credit hour. What can be concluded from the rise in tuition relative to overall inflation?
a. Tuition rates increased at the same rate as inflation. b. Tuition rates increased at a slower rate than inflation. c. Tuition rates increased at a faster rate than inflation. d. Tuition rates and inflation cannot be compared with the numbers given.
June owns a farm, and has a right to spray it with pesticides. Unfortunately, the pesticides kill her neighbor’s bees and cost him $5,000 per year. June can use a spray that does not harm the bees for a cost of $2,000 more per year. What can June’s neighbor do that would demonstrate the Coase theorem?
a. Sue June for the $5,000 in damages. b. Offer June $3,500 to spray the bee-friendly spray. c. Find a way to do $5,000 damage to June’s farm. d. Offer to pay $1,000 toward the bee-friendly spray.