Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Chapter 35, Problem 2.8P
To determine
Compare the capitalist economy and the socialist economy on the basis of distribution of income.
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What did mercantilism see as the economic goal for society? Why was poverty seen as essential?
Give one paragraph (short) explanation for the above question.
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What type of society did Karl Marx believe was fair to all workers?
Marx believed the upper, middle, and lower classes should be defined by society.
Marx believed factory owners should keep all profits rather than distributing them to the workers.
Marx believed that a capitalist economy had the most benefits for workers.
Marx believed a classless society was fair to all workers and could be achieved by developing a command economy.
Chapter 35 Solutions
Principles of Economics (12th Edition)
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- Suppose that Eric believes that the government should aim to raise the welfare of the poorest people in society, because if we all started in the exact same position in life and then created rules and laws to obey as a society, people would be concerned about ending up at the bottom of the income distribution. Which redistributive philosophy is consistent with Eric's view? Utilitarianism Liberalism Libertarianism.arrow_forwardProblems of deprivation are viewed as an inevitable outcome of the prevailing capitalist economic order.explainarrow_forwardPlease use the graph to answer the given questions. Assume the people act rationally. Which of the statements best describes a situation represented by point A? Look at the image to solve for this Jeff agrees to lend money to his brother, who plans to use the funds to open a shoe store. Wayne projects that if he takes out a loan to open another gym franchise, he will earn a lower return than the interest rate he would have to pay, so he decides against it. Janine predicts that, if she borrows to expand operations, she will earn a rate of profit higher than the interest rate of the loan. So, she decides to take out the loan. Carly decides against purchasing a corporate bond because she has another investment opportunity that returns 17%. Given the market conditions, what will be the prevailing interest rate? 18% 2% 17% 10% 6% Given the market conditions, how much will be available in loanable funds? $90 billion $50 billion $30 billion $70…arrow_forward
- How is it that the problem of who to produce for is resolved in the capitalist system?arrow_forwardIs capitalism associated more with a market or command economy? Why would capitalism be able to do "millions of things better" than a centrally planned economy? What things do you think a capitalist society would be more successful at than a centrally planed society?arrow_forwardPositive or Normative?arrow_forward
- Condition that arises because society does not have enough resources to produce all the things people would like to havearrow_forwardOne of the famous Utopian Socialists, Robert Owen, disagreed with Adam Smith that self-interest would bring harmony of interest. Explain his viewpoint on the relationship between human character and their surrounding environment and the social revolution that he introduced in his New Lanark Mills in order to prove his theory. Explain in brief why Marxian Socialism dismissed the moderate approach used by Utopian and Christian Socialism to eradicate the worst aspect of Capitalismarrow_forwardHow does the welfare state help stabilise the capitalist system?arrow_forward
- Apart from society's laws, according to Hobbes, a person's rights are based on the laws of God. our natural desire to look after the interests of the others of our species. the objective moral order known by every rational mind. their "pedigree" or inheritance. the amount of power that one has.arrow_forwardWhat are the advantages of capitalist economyarrow_forwardIncome inequality is necessary for Pareto optimality so that people will work as hard as they can.” “If income is distributed equally, then there must be Pareto optimality because you can’t make one person better off without making someone else worse off.” Are these statements true or false? Why or why not?arrow_forward
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