Under a negative income tax program,
A. the government guarantees a minimum level of family income.
B. a family must pay income taxes on its welfare check.
C. a family receives a stated amount of money from the government plus its members can keep all income earned through work.
D. the government reduces the welfare payment by any income earned through work.
Answer: A
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Risk taking
A. is economically wasteful. B. is a cause of income inequality. C. is not a cause of income inequality. D. evens out income inequality because of the bell curve.
Investment in both physical and human capital enhances economic growth because it:
a. increases consumption during the current period. b. makes it possible for individuals to produce more goods and services per hour worked. c. encourages firms to expand output by employing more low-productivity workers. d. encourages workers to unionize and, thereby, fight for higher wages.
Restaurants will add high-price food items to the menu to lure diners to choose foods just below the high-price items. These items generally have the highest profit margin. This is an example of:
A. choice architecture. B. enlightened self-interest. C. price discrimination. D. irrational behavior.
When the economy is producing at full capacity, the aggregate supply curve becomes
A. horizontal. B. upward sloping. C. downward sloping. D. vertical.