Question

Pick any 2 questions and answer it ( answers should be half page long per question):

1.Bill Gates is a founder of Microsoft and the world's richest individual. Suppose Microsoft sells more software and Mr. Gates acquires another billion dollars in wealth. Simultaneously, suppose a burglar whose income is well below average broke into Bill Gates' house and stole a million dollars worth of antiques. Using the "it's not fair if the rules aren't fair" approach to fairness, is Mr. Gates' acquisition of additional wealth fair? Is the (poor) thief's acquisition fair?

2. What is your opinion on price ceilings in the market for gasoline? Price ceilings were last imposed in the 1970s: To help ration gasoline, drivers were allowed to buy gasoline only on certain days. If the car had an even numbered license plate, the driver could buy on even numbered days and vice versa for cars with odd numbered license plates. (On the 31st of a month, anyone could buy gasoline.) But gas stations sold gasoline for only a limited number of hours per day and it typically took 60 minutes to get gasoline. The station would indicate it was selling gasoline by hoisting a green flag; when it stopped selling that day, the station showed a red flag.

3. Healthy economy caused a positive relationship between wages and employment. Explain.

4. Widely scapegoated by the general public and our elected officials as the greedy profiteers responsible for the recent economic collapse, high-income corporate executives have been made potential targets for federally mandated compensation limits. Do you believe that companies should be allowed to determine how much to pay their workers, or if the federal government should get to decide?

5. The level of income over which people pay no tax has been rising over the last decade, so nowadays many people’s incomes fall below the level at which the income tax is imposed. In fact, after deductions, exemptions, and credits about 47 percent of all tax filers in the U.S. actually pay zero (or even negative) income taxes, whereas the top 1 percent of taxpayers pay about 40 percent of all the income taxes and the top 10 percent pay about 70 percent. Do you think this trend is fair or unfair? What do you predict will happen if the trend continues?

6. During 2007, as oil and gas prices continued to increase, a growing number of Americans called for the United States to become less reliant on Middle-Eastern oil. Would it make sense for the United States to try to become totally self-reliant in the production of oil? Why or why not?

Answer 1

3. Okun's law has clearly stated that when unemployment falls by 1% then Gross National Product (GNP) rises by 3 %. and in another law of okun mentioned a relationship between Unemployment and GDP whereas % rise in unemployment Gross Domestic Product (GDP) fall down by 2 percentage. Healthy economy means where Growth, unemployment, Inflation are in balance. On the basis of research done by economists reveals that ideal percentage of GDP of any economy is between 2 percentage to 3 percentage.

Neo- classical theory assumes that Higher slightest wages will lead to Minimize employment. This may take place for two reason: Firstly, Minimum wage rate may exert companies to increase the prices of their product and services provided by them and domestic, International customer cut down their demand for the product when they face rise in price of the product. secondly, when Minimum wage rate workers become more "exorbitant" just because of the minimum wage rate system, Companies may take a decision to replace some of their workers with technology and experienced , skilled workers to work on these. however, Economy will be healthy when employment, unemployment, wages are balanced this will lead to growth in National Income of the economy, GDP will rise then economy will developed and prospects.