With a negative income tax, the larger the difference between the break-even income level and the guaranteed level,
a. the greater the tax rate (by definition).
b. the greater the incentive to work.
c. the smaller the number of people eligible to receive benefits.
d. the more inequitable the resulting distribution of income will be.
b
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Examples of comparative advantage often begin with two countries that each produce the same two goods
Each country is then shown to have a comparative advantage in producing the good it can produce at a lower opportunity cost, and specializes in the production of the good for which it has a comparative advantage. How do these examples prove that both nations are made better off as a result of trade than they would be without trade?
The real GDP data could be properly thought of as
a. an index of our economic well-being. b. a measure of the total wealth of a nation. c. an index of total output or productive activity. d. an index that measures the size of government.
Answer the following questions true (T) or false (F)
1. One effect of adverse selection in a market is that the equilibrium quantity of the product may be smaller than it would have been if there were no asymmetric information problems. 2. Due to adverse selection, very few lemons will be sold in the market for used cars. 3. The situation in which one party to a transaction takes advantage of knowing more than the other party to the transaction is known as asymmetric information.
If a new governmental policy increases unemployment benefits, we would expect the labor ________ curve to shift to the ________.
A. demand; left B. demand; right C. supply; right D. supply; left