policies aimed at the ladder of opportunity. A production possibility frontier showing a strict tradeoff

between economic output and equality will be downward sloping. A PPF showing that it is possible to

increase equality, at least to some extent, while either increasing output or at least not diminishing it

would have a PPF that first rises, perhaps has a flat area, and then falls.

13. Many view the redistribution of income to achieve greater equality as taking away from the rich to pay the

poor, or as a “zero sum” game. By taking taxes from one group of people and redistributing them to

another, the tax system is robbing some of the American Dream.

Chapter 16

1. a.

Imperfect information is relatively low; after all, you can see the apples.

b.

Imperfect information is relatively low. The neighborhood restaurant probably has a certain local

reputation.

c.

Imperfect information is relatively high. How can you tell whether the computer is really in good
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