The incentives built into nearly all welfare programs
A. encourage work.
B. encourage family planning.
C. encourage savings.
D. discourage marriage.
Answer: D
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In a model of consumption and leisure, a drop in the wage will cause workers to work less if tastes are quasilinear in leisure.
Answer the following statement true (T) or false (F)
There are only two people in the world (Adam and Eve) and only one good (apples). Adam has four apples and a total utility in money terms from apple consumption of $16; Eve has four apples and a total utility from apple consumption of $20. Which of the following statements must be true?
A. Eve’s marginal utility from consuming her fourth apple must be greater than Adam’s marginal utility from consuming his fourth apple. B. The total utility of society will rise if Adam gives Eve one apple. C. If Adam and Eve each always has a positive marginal utility from consuming apples, the total utility of society can only be increased by an increase in the total number of apples available for consumption. D. Adam’s average utility from consuming apples is greater than Eve’s average utility from consuming apples.
Other things being constant, countries with higher rates of saving
a. will have smaller GDPs than countries with lower rates of saving. b. will have higher rates of investment, but slower growth. c. will have higher rates of investment and growth. d. will be operating at less than full employment and potential output.
All of the following are properties of typical indifference curves except
a. higher indifference curves are preferred to lower ones. b. indifference curves are downward sloping. c. indifference curves do not cross. d. indifference curves are bowed outward.