Income assistance benefits are
a. taxed at a high marginal rate, in the sense that benefits sharply decrease as earned income increases
b. taxed at a 20 percent marginal rate
c. taxed at a high marginal rate in order to provide work incentives
d. unaffected by increases in earned income
e. positively related to income from other sources
A
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An external effect that generates costs to a third party is called
a. free-ridership c. a negative externality b. a positive externality d. a marginal private cost
Which of the following events would lead to an increase in the marginal product of labor for every quantity of labor?
A) An increase in the real wage B) A decrease in the real wage C) A favorable supply shock such as a fall in the price of oil D) An adverse supply shock, such as a reduced supply of raw materials
A large U.S. steel firm wants to restrict imports of Japanese steel, but Ford Motor Company wants fewer restrictions on steel so that the price of steel will go down. This can best be described as
a. a zero-sum game b. a competing-interest situation c. a special-interest situation d. a situation without widespread costs and benefits e. an argument over distribution of a public good
Suppose a monopolist charges a price of $27 for its product and sells 10 units at that price. At 10 units of production the firm has average fixed cost equal to $10 and average variable cost equal to $12 . How much total profit is the firm earning at this price?
a. $5 b. $25 c. $50 d. $140