Jack F. Altrades's decision whether to purchase a good from a firm or hire resources directly in the market will
a. depend, in part, on his production skill but not on his contract negotiation skill
b. depend, in part, on the opportunity cost of his time but not on his skill
c. not depend on the cost of identifying, measuring, and pricing inputs
d. not depend on the cost of negotiating contracts
e. depend, in part, on both his skill and the opportunity cost of his time
E
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Consider an income tax and a head tax, the sizes of which have been set so that the government collects the same amount of money under each tax. Which tax does the consumer prefer?
a. The consumer is indifferent between the two taxes, since he pays the same amount of money under each tax.
b. The consumer prefers the head tax, because it does not lower the relative wage as does the income tax.
c. The consumer prefers the income tax, because it can be avoided by increasing the amount of leisure time consumed.
d. The consumer may prefer either tax, depending on whether the income tax increases or decreases the number of hours of work at the optimum.
Refer to the graph below. Assume the consumer has an income of $100, the price of X is $2 and the price of Y is $1. According to the graph, the substitution effect of a decrease in the price of X from $2 to $1 is equal to: 
A. 5 B. 20 C. 30 D. 25
Potential Pitfalls When Using Scientific Thinking
What will be an ideal response?
Which of the following is targeted narrowly to pregnant women and their infant children?
A. AFDC B. WIC C. SNAP (Food Stamps) D. TANF