Question

Raising taxes and increasing welfare payments a. proves that there is such a thing as a free lunch. b. reduces market power. c. improves efficiency at the expense of equality. d. improves equality at the expense of efficiency.

Answer 1

Answer: Option(d) is correct

Explanation:

According to the question, increasing taxes along with increasing amount given to poor ,ill or other severe-conditioned people by government can impact the people by increment in equality state at the cost of efficiency. Efficiency of society will be at hold while equality through providing payment ,service and health care is raised in this situation.

Other options are incorrect because free lunch, reduction in power of market and increment in efficient at cost of equality will not take place if taxes are raised with pay of welfare.Thus, the correct option is option(d).

Answer 2

Answer:

The correct answer is letter "D": improves equality at the expense of efficiency.

Explanation:

By raising taxes and allocating those funds to welfare payments, the government is increasing equality. The poor will receive more money thanks to the contribution of the taxpayers. However, efficiency will be reduced since the funds are not necessarily being sent to the most valuable activity it can be used for such as improving national industries.