Suppose a policy change will generate $100,000 of benefits for low-income families and $120,000 of costs for high-income families. This change can best be described as
A) Pareto efficient.
B) inefficient.
C) potentially efficient.
D) equitable.

Question

Quizplus · Accepted Answer

The policy change will generate $100,000 of benefits for low-income families and $120,000 of costs for high-income families. This means that the policy change will make low-income families better off and high-income families worse off. Therefore, the policy change is inefficient.

Suppose a Policy Change Will Generate $100,000 of Benefits for Low-Income