John Doe participates in a welfare program which pays him $6,000 dollars. He can work but he loses 50 cents of the welfare check for every dollar he earns over $5,000, if John wants to live on more than $11,000 per year and he can find a minimum wage job for $8.00/hour, what is his effective wage that he would consider when deciding whether or not to work?
A. $4/hr.
B. $0/hr.
C. $8/hr.
D. $17,000 divided by 2000 hours in a year = $8.5.
Answer: A
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Which of the following is a difference between a perfectly competitive market and a monopoly?
A) There are huge barriers to entry in a perfectly competitive market, while there are no barriers to entry in a monopoly. B) The sellers in a perfectly competitive market are price makers, while a seller in a monopoly market is a price taker. C) The equilibrium price in a perfectly competitive market exceeds marginal revenue, while the equilibrium price in a monopoly equals marginal revenue. D) The market demand curve faced by a perfectly competitive firm is horizontal, while the market demand curve in a monopoly is downward-sloping.
Which of the following describes a situation in which demand must be inelastic?
a. Total revenue decreases by 10 percent when the price of spats rises by 10 percent. b. Total revenue decreases by less than 10 percent when the price of spats rises by 10 percent. c. Total revenue increases by more than 10 percent when the price of spats rises by 10 percent. d. Total revenue decreases by $10 when the price of spats rises by $10. e. Total revenue decreases by more than $10 when the price of spats rises by $10.
What is the difference between explicit costs and implicit costs? Explain your answer using examples
Fiscal policy is typically:
A. extremely flexible provided policy lags are short. B. extremely flexible because most government spending is discretionary. C. difficult to implement quickly. D. flexible despite the presence of implementation problems.