A Utilitarian Government Has to Balance the Gains from Greater

question 140

Multiple Choice

A utilitarian government has to balance the gains from greater income equality against the losses from distorted work incentives. To maximize total utility, therefore, the government

• A)would never tax labor income.
• B)must always achieve a fully egalitarian society.
• C)enacts policies that only benefit the middle class.
• D)stops short of a fully egalitarian society.

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Definitions:

Party and Party Basis

A legal term referring to the assessment of legal costs that are to be paid by one party to another in a lawsuit.

Contribution Margin

The amount by which sales revenue exceeds variable costs, contributing to covering fixed costs and generating profit.

Marginal Trend

A minor change or adjustment in a pattern or sequence over time, often indicating a slight shift in behavior or performance.

Breakeven Point

The point at which total costs and total revenue are equal, meaning there is no profit or loss.