Practice Midterm 1
Suppose the government taxes the wealthy at a higher rate than it taxes the poor and then develops programs to redistribute
the tax revenue from the wealthy to the poor. This redistribution of wealth is more equal but less efficient for society
Panel (a) shows the opportunity cost of one
computer is highest when the economy produces 12
computers
Panel (a) and Panel (b), a shift of the economy’s
production possibilities frontier from Panel (a) to
Panel (b) could be caused by an improvement in
printer production technology
Panel (a) Panel (b)
A
B
C
F
computers
5
6
7
8
9
10
11
12
13
computers
4
5
6
7
8
9
10
11
12
13
