Give two reasons why Social Security is compulsory for most workers
What will be an ideal response?
Since the Social Security program redistributes resources as well as provides insurance, it makes sense that it is compulsory for two reasons. First, the redistributive nature of the program makes it a bad deal for high-income workers who would likely opt out of the system if they were able to. This is called the adverse selection problem. Second, the pay-as-you-go nature of the program requires a regular influx of new contributors, thus new workers need to be forced to enter into the system as it needs their contributions.
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Up until the early 1880s, there was no federal control over private activities
Indicate whether the statement is true or false
A firm's short-run supply curve shows the relationship between price and quantity supplied.
Answer the following statement true (T) or false (F)
Refer to the information provided in Table 31.2 below to answer the question(s) that follow.Table 31.2PeriodQuantity of Labor (L)Quantity of Capital (K)Total Output (Y)1 50 50 2002 50 60 2153 50 70 2254 50 80 230Refer to Table 31.2. From Period 2 to Period 3, the marginal return to capital is equal to
A. 1.0. B. 2.0. C. 3.21. D. 3.58.
Suppose a company expects prices in general to rise by 5%, but the price of its product rises by 2%. How will the company respond to the price change?
A) It will increase production since it's getting a higher price for the product. B) It will increase production more slowly since it's price is rising more slowly than average. C) It will reduce production since it perceives a relative decline in the demand for its product. D) It will stop production and shut down until prices rise more quickly.