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1. If you could finance a new venture with either a stock issue or bonds, which option would you choose? What are their respective (dis)advantages? (4 points)
2. Why are incomes distributed so unevenly? Identify and explain three major causes of inequality. (4 points)
3. How might a flat tax affect efficiency? Fairness? Explain (4 points)
4. Should the Social Security earnings test be eliminated? What are the benefits and costs of doing so? (2 points)
5. Suppose we refused to sell goods to any country that reduced or halted its exports to us. Who would benefit and who would lose from such retaliation? (2 points)
6. Domestic producers often base their demands for import protection on the fact that workers in country X are paid substandard wages. Is this a valid argument for protection? (2 points)
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