TESTBANk (B)

Which of the following words and phrases best captures the notion of equality?

• minimum waste

• maximum benefit

• sameness

• efficiency

When society gets the most it can from its scarce resources, then the outcome is called

• equitable.

• efficient

• normal.

• efficacious.

A typical society strives to get the most it can from its scarce resources. At the same time, the society attempts to distribute the benefits of those resources to the members of the society in a fair manner. In other words, the society faces a tradeoff between

• guns and butter.

• efficiency and equality.

• inflation and unemployment.

• work and leisure.

When the government redistributes income from the wealthy to the poor,

• efficiency is improved, but equality is not.

• equality is improved, but efficiency is not.

• both efficiency and equality are improved.

• neither efficiency nor equality are improved.

Which of the following is true?

• Efficiency refers to the size of the economic pie; equality refers to how the pie is divided

• Government policies usually improve upon both equality and efficiency

• As long as the economic pie continually gets larger, no one will have to go hungry

• Efficiency and equality can both be achieved if the economic pie is cut into equal pieces

As a result of a successful attempt by government to cut the economic pie into more equal slices,

• the pie gets larger, and there will be more pie overall

• the pie gets smaller, and there will be less pie overall.

• it increases the reward for working hard, resulting in people producing more goods and services

• those who earn more income pay less in taxes.

When the government redistributes income from the wealthy to the poor,

• efficiency is improved, but equality is not.

• both wealthy people and poor people benefit directly.

• people work less and produce fewer goods and services.

• the government collects more revenue in total.

When the government attempts to improve equality in an economy the result is often

• an increase in overall output in the economy

• additional government revenue since overall income will increase.

• a reduction in equality

• a reduction in efficiency.

When the government implements programs such as progressive income tax rates, which of the following is likely to occur?

• equality is increased and efficiency is increased.

• equality is increased and efficiency is decreased.

• equality is decreased and efficiency is increased.

• equality is decreased and efficiency is decreased.

A likely effect of government policies that redistribute income and wealth from the wealthy to the poor is that those policies

• enhance equality

• enhance efficiency.

• increase the reward for working hard

• All of the above are correct.