economies of scale d all of the above phas production possib

economies of scale (d) all of the above pha\'s production possibilities curve reflects (a) increasing costs (b) diminishing returns () If Alpha is producing 12 cars and 2 computers and now decides to increase computer output to 4, th cannot be determined from the information provided e cost will be (a) zero, because unemployed resources are available (b) 2 cars (c) 6 cars (d) 19. The combination of computers and cars shown by point G is (a) attainable, but too costly (b) unattainable, given current resources (e) attainable, but will generate unemployed resources (d) not a good choice because it favors car production over capital goods production 20. The combination of computers and cars shown by point F is (a) attainable (b) inefficient production (c) will generate unemployment and underutilization of resources (d)a The next five questions are based on the Lorenz curve model below joc 80 60 f0 2 0 o 20 40 6 0 o (b) B (c)C (d) 21. Income distribution is the most equally distributed in country (a) A insufficient information provided to answer this question 22. In country C, the top 20% of the population has a larger percentage of total income than the top 20% of the population in country A or country B has of their total income introduces a new highly progressive income tax, we would 23. If the expect country C\'s Lorenz curve to (a) shift to the right (b) shift to the left (c) remain unchanged because taxes have no effect on income distribution (d) insufficient information provided to answer this question C 24. The median income is equal to the mean income in country (a) A (b)B (c)C (d) insufficient information provided to answer this question 25. Country C (a) has less total income than country A or B (b) has a worse distribution of income than country A or B but a better distribution of wealth than A or B (c) has a larger middle income class than country A or B (d) none of the above

Solution

21. Income distribution is most equally distributed in the country A. The closer a country\'s Lorenz curve is to the 45-degree line, the more equally distributed the income in that country is. The correct answer is (A).

22. The statement is true. In country C, top 20% population have around 60% of the income while top 20% have around 40% income in country B and in country A, top 20% population have 20% income.

23. A highly progressive tax plan will shift the Lorenz curve to the left as it reduces the income inequality. Hence the correct answer is (B).

24. The median income is equal to the mean income in country A. Hence the correct answer is (A).

For questions 17-20, a graph is required which has not been provided.