In what ways can income redistribution be viewed as a public good?
What will be an ideal response?
Income redistribution may have many public benefits. It generates collective psychological benefits by making us feel better about ourselves. If it eliminates or reduces hunger, then disease may be reduced as well. There may be lower crime rates. However, income redistribution also suffers from the free-rider problem and the drop-in-the-bucket problem. Individuals can benefit from the drop in poverty even if they have not contributed. In addition, poverty is a huge problem and one person's contribution will likely have little effect.
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A market economy allocates resources primarily in accordance with orders from government bureaucrats.
Answer the following statement true (T) or false (F)
Economists account for changes in tastes for a good as:
A. irrelevant for the demand curve. B. shifts in the demand curve. C. not demonstrable on the demand curve. D. movements along the demand curve.