Which of the Following Is an Example of an Efficiency-Equity

question 185

Multiple Choice

Which of the following is an example of an efficiency-equity trade-off faced by economic agents?

• A)According to an article by in the American Journal of Public Health by Edward Kaplan and Michael Merson of Yale University School of Medicine, the federal government's current method of allocating HIV-prevention resources is not cost-effective. Instead of allocating resources to states in proportion to reported AIDS cases, resources should flow first to those activities that prevent more infections per dollar and then to less and less effective combinations of programs and populations until funds are exhausted, even if it means that some populations would be left without any prevention services.
• B)Concerned about the falling birth rate, the French government has pledged more money for families with three children, in an effort to encourage working women to have more babies.
• C)Some U.S. colleges are actively recruiting foreign students for their technology-based programs.
• D)All New York City art museums are considering adopting a free-admission policy for local residents one weekend per month.

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Definitions:

Marginal Tax Rate

The marginal tax rate is the rate of tax that applies to the next dollar of taxable income above a pre-determined level.

Call Premium

The additional amount a bond issuer must pay over the bond's face value if it is called before its maturity date.

Closely Held

Refers to a company whose shares are owned by a relatively small number of shareholders, often with the shares not being traded publicly.

Going Public

The process by which a private company offers shares to the public in a new stock issuance, becoming a publicly-traded company.