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Author Question: In general, the optimal taxation literature finds that a society can maximize social welfare through ... (Read 79 times)

EAugust

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on: Jul 1, 2018
In general, the optimal taxation literature finds that a society can maximize social welfare through income redistribution.
 
  a. True b. False

Question 2

Suppose firms A and B each make T-shirts. Firm A's production function is q = L0.5 K0.5. Firm B's production function is q = 1.2  L0.5 K0.5.
 
  If the two firms each hire the same amounts of capital and labor, compare the two firms in terms of APL and MPL.


aruss1303

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Reply #1 on: Jul 1, 2018
Answer to Question 1

a

Answer to Question 2

Firm B's APL and MPL will equal 1.2 times the APL and MPL of firm A.


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