Which of the Following Arguments Support the Proposition That Society

question 215

Multiple Choice

Which of the following arguments support the proposition that society should accept at least some income inequality?

• A) Income redistribution will require taxation, causing inefficiently low levels of labor supply and saving, thus decreasing the size of the economic pie.
• B) Administrative costs associated with income redistribution imply that low-income people receive less than $1 for each dollar taken from high-income people.
• C) Income redistribution programs divert skilled labor and capital to tax compliance activities and away from production of goods and services that people value.
• D) All of the above answers are correct because all support the proposition that society should accept some income inequality.

---

Definitions:

Equilibrium

A state in a market where the quantity demanded by consumers equals the quantity supplied by producers, leading to a stable price.

MPs

Members of Parliament, elected officials who represent constituencies and have legislative responsibilities in the national government.

Purely Competitive Conditions

A market structure characterized by many buyers and sellers, where each seller offers an identical product, leading to price taken as given by individual sellers due to the market's competition.

Marginal Product Data

Information that shows the additional output generated by adding one more unit of a factor of production, holding all else constant.