Redistribution can be thought of as insurance because _____
a. those with low incomes often do not think of purchasing insurance
b. those with low incomes cannot afford insurance
c. individuals want to protect themselves from the small probability that they might become impoverished
d. a and b
c
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In New York City, when he was the mayor Michael Bloomberg recommend that the city, with the help of private donors, make cash payments to poor and underprivileged parents who can certify that their children are attending school on a regular basis
The payments would start after third grade and go through high school, rising each year as dropout rates get higher and a child's forgone earning potential is higher. What economic concept does this policy represent? A) public goods B) incentives C) externalities D) technological progress E) the "invisible hand"
If an individual is maximizing his or her utility, his or her marginal rate of substitution of leisure hours for consumption will be:
a. equal to one divided by his or her wage rate. b. greater than one divided by his or her wage rate. c. equal to his or her wage rate. d. less than his or her wage rate.
Brandon receives a marginal utility of 5, 4, 3, 2, 1, and 0 from eating successive donuts. Successive cups of coffee provide him with 9, 8, 6, 4, 3, and 2 utils of marginal utility. Donuts cost 50 cents each, coffee costs $1 per cup, and Brandon has $3 to spend. Which of the following options will yield Brandon the greatest utility?
a. six donuts b. four donuts and one cup of coffee c. two donuts and two cups of coffee d. four donuts and one cup of coffee
According to the law of comparative advantage, both individuals and nations will be able to produce a larger joint output if each productive activity is undertaken by
a. the high opportunity cost producer. b. the low opportunity cost producer. c. the producer who is able to hire workers at the lowest wage. d. the party that can complete the productive activity most rapidly.