Minimum wages are examples of
A) a price floor.
B) a price ceiling.
C) the rationing function of prices not working.
D) government increasing the demand for certain products.
A
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The above figure shows Bob's utility function. He currently has $100 of wealth, but there is a 50% chance that it could all be stolen. Bob will buy theft insurance to cover the full $100
A) as long as it does not cost more than $25. B) as long as it does not cost more than $50. C) as long as it does not cost more than $70. D) at any price.
With a negative income tax, the larger the difference between the break-even income level and the guaranteed level,
a. the greater the tax rate (by definition). b. the greater the incentive to work. c. the smaller the number of people eligible to receive benefits. d. the more inequitable the resulting distribution of income will be.