40 Which policy would a Rawlsian economist not support A B C

40. Which policy would a Rawlsian economist not support? A) B) C) D) a reduction in capital gains taxes benefiting high-income earners an increase in the top income tax bracket an increase in government spending programs aimed at the poor a more progressive tax structure

Solution

40. A Rawlsian economist would not support a reduction in the capital gains taxes benefitting the rich. The correct answer is (A).

1. A firm in the perfectly competitive market would exhibit the 1st characteristic i.e an ability to produce as much output as the firm desires at the current market price. The correct answer is (A) i.e Only I. A firm in the perfectly competitive market earns zero economic profit even in the long run.

2. The sequence of market structures according to the barriers of entry from the fewest to the most is perfect competition, oligopoly and then monopoly. The correct answer is (C).

3. In a perfect competition, the price would remain the same even if the firm increases output. The correct answer is (B).

4. The profit-maximizing output will be at the point where MR = MC i.e. 14. The price will be the point where demand curve intersects MR curve i.e. $12. The correct answer is (D) i.e. Price = $12; Quantity = 14