单选题
A candidate for public office has proposed a program of wealth
transfers based on the principles of utilitarianism. In support of her proposal,
she makes the following statements:
Statement 1: "Increasing
taxes on high income earners will cause them to work more hours to maintain
their after-tax income, resulting in greater economic output. "
Statement 2: "The government will need to hire people to manage and administer
the wealth transfers. These new jobs will further expand economic output.
"
Are these statements correct or incorrect?
Statement 1
Statement 2
①A.
Incorrect
Correct
②B. Correct
Incorrect
③C. Incorrect
Incorrect
【正确答案】
C
【答案解析】Both statements are incorrect. Increasing taxes on high income earners reduces their incentive to work, which results in less labor being supplied and lower economic output. The labor needed to administer wealth transfers must be diverted from other uses that provide value to consumers. This moves resources away from a productive use, which reduces economic output.