Higher marginal tax rates for welfare programs will
A. Increase the number of people eligible for welfare.
B. Decrease the incentive to work.
C. Increase total welfare costs.
D. Decrease the moral hazard associated with welfare.
Answer: B
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Search activity ________
A) occurs when there is a surplus of the good B) is unnecessary when a black market exists C) increases when an effective price ceiling is set on a good D) decreases when an effective price ceiling is set on a good
Users of commodities are:
A. likely to take the short position in a futures contract. B. usually not participants in futures contracts. C. buyers of futures. D. speculators preferring to get the large returns which result from large risk.
The indifference curves of two investors are plotted against a single budget line. Indifference curve A is shown as tangent to the budget line at a point to the left of indifference curve B's tangency to the same line
A) Investors A and B are equally risk averse. B) Investor A is more risk averse than investor B. C) Investor A is less risk averse than investor B. D) It is not possible to say anything about the risk aversion of the two investors, but they will hold the same portfolio. E) It is not possible to say anything about either the risk aversion or the portfolio of the two investors.
Macland can produce 150 sweaters or 75 bushels of rice. Microland can produce 50 sweaters or 50 bushels of rice. What country has a comparative advantage in rice?
a. Macland and Microland can produce rice at the same opportunity cost. b. Macland can produce rice at a lower opportunity cost. c. Microland can produce rice at a lower opportunity cost. d. Microland can produce rice at a higher opportunity cost