Alvin can produce either 18 chairs or 9 tables in a week, while Dean can produce either 16 chairs or 4 tables in a week. If the terms of trade are established as 1 table for 2 chairs, there are no incentives for Alvin to specialize and trade with Dean

Which of the following statements is true?

A) The slope of the labor supply curve depends only on the income effect of a wage rate change. B) The income effect and the substitution effect of a wage rate change work in the same direction. C) The income effect and the substitution effect of a wage rate change work in opposite directions. D) The slope of the labor supply curve depends only on the substitution effect of a wage rate change.

The best government policy to reduce poverty is

a. a minimum wage law because the resulting unemployment is small in comparison to the benefits to people it helps. b. an expanded welfare program because people must have an additional "need" such as small children or a disability. c. an in-kind transfer because it ensures that the poor receive what they need most such as food or shelter. d. not obvious. Government programs to reduce poverty have many advantages but also many disadvantages.