As pointed out by the "big tradeoff," government action that redistributes incomes so that everyone has the same income leads to
A) fairness according to the "fair rules" approach.
B) efficient markets.
C) resources being allocated according to a command system.
D) a smaller total output.
E) lower taxes on the rich than on the poor so that the rich do not lose their incentive to work.
D
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If the demand for a good is determined to be "elastic," then the elasticity measure
A) is greater than 1.0. B) is equal to 1.0. C) is less than 1.0. D) is infinite.
Suppose the U.S. can produce 10 units of food and 5 units of clothing (or any such linear combination) and Canada can produce 6 units of food and 4 units of clothing (or any such linear combination). If trade occurs between these two countries, which should produce more food and which more clothing?
What will be an ideal response?