Refer to the diagrams that show identical marginal utility from income curves for Singer and Catalano. If a given income of $20,000 is initially distributed so that Singer receives $15,000 and Catalano $5,000:
A. no judgment can be made as to the effect of a redistribution of income on total utility.
B. this initial distribution of income is maximizing the combined total utility of the two consumers.
C. the combined total utility of the two consumers can be increased by redistributing income from Catalano to Singer.
D. the combined total utility of the two consumers can be increased by redistributing income
from Singer to Catalano.
D. the combined total utility of the two consumers can be increased by redistributing income
from Singer to Catalano.
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Suppose that the equilibrium nominal interest rate is 4 percent and the equilibrium quantity of money is $1 trillion. At any interest rate above 4 percent,
A) less than $1 trillion will be demanded and bond prices will fall. B) more than $1 trillion will be supplied and bond prices will fall. C) there is a shortage of money and the interest rate will rise. D) more than $1 trillion will be supplied and the interest rate will rise. E) less than $1 trillion will be demanded and bond prices will increase.
Some economists have argued that certain characteristics of the delivery of health care justify government intervention. One of these characteristics is
A) health care is a public good. B) health care is nonrivalrous and nonexcludable. C) health care generates negative externalities. D) health care generates positive externalities.