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A worker's total earnings for one day is $100. He received a $20 fixed payment and consumes 14 hours of leisure. What is the hourly wage rate? Show solutions.
Suppose an individual's marginal rate of substitution is three slices of
pizza for one beer at the present bundle of beer and pizza she is consuming. If
the price of beer is $1.00 and the price of a slice of pizza is $1.50, is the
consumer maximizing her welfare? If not, how should she change her
consumption?
A 1996 bill reforming the federal government’s anti-
poverty programs limited many welfare recipients to
only two years of benefits.
a. How does this change affect the incentives for
working?
b. How might this change represent a trade-off
between equality and efficiency?
A 1996 bill reforming the federal government’s anti-
poverty programs limited many welfare recipients to
only two years of benefits.
a. How does this change affect the incentives for
working?
b. How might this change represent a trade-off
between equality and efficiency?
A recycling program provides a machine that accepts glass and plastic bottles and gives recyclers coupons that can be redeemed inside the store where the machine is located. The machine is used less than the recycling program organizers had hoped. How would an economist explain this?
Group of answer choices
Despite the posted notice, people do not trust that the coupons will, in fact, be accepted in the store, at their face value, the same as cash.
Although the machine performs an automated exchange of one thing for another, it is not really an economic transaction, and therefore people are reluctant to participate.
The time required to use the machine and the requirement that the coupons be redeemed at that store together add up to too high an opportunity cost.
People understand the benefits of recycling glass and plastic bottles.
People like recycling glass and plastic bottles.
A restaurant patron has a coupon for one free dessert. The choices are the cake, the sorbet, the pie and the ice-cream. The patron’s first choice would be the cake, and the second choice would be the sorbet. What is the opportunity cost of choosing the pie? (Only one dessert can be chosen.)
Group of answer choices
missing out on the cake
missing out on the sorbet
missing out on the ice-cream
the dollar value of the pie
the combined dollar value of the cake, the sorbet, and the ice-cream.
Carl said, “No matter the price, I will always buy five gallons of ice cream a week. I love ice cream!”. What can we say about Carl’s price elasticity of demand for ice-cream?
Group of answer choices
Carl’s demand for ice-cream is perfectly elastic.
Carl’s demand for ice-cream is perfectly inelastic.
The price elasticity of Carl’s demand for ice-cream is equal to 1.
The price elasticity of Carl’s demand for ice-cream is greater than 1.
Carl’s demand for ice-cream is unit elastic.
A subsidy to orange farmers will shift the ________ curve of oranges to the ________, making the equilibrium price ________.
Group of answer choices
demand; left; decrease
supply; right; increase
demand; right; increase
supply; left; increase
supply; right; decrease
Consider the market for bread. Flour is an ingredient for making bread. If the price of flour increases, we could predict that
Group of answer choices
The supply of bread shifts to the right.
The supply of bread shifts to the left.
The equilibrium price of bread decreases.
The equilibrium quantity of bread increases.
The quantity supplied of bread increases.
One unintended consequence of unemployment benefit program is that people may not work and just rely on unemployment benefit. What is a solution to solve this problem?
Group of answer choices
The government can increase the unemployment benefit.
The government can limit the time period for receiving the unemployment benefit.
The government allows more people to receive unemployment benefit.
The government can increase wage income tax.
The government can lengthen the time period for receiving the unemployment benefit.
