Adoption of a guaranteed annual income with benefits (B) given by B = 20,000 -.5 (earnings) would be expected to reduce work effort by low wage workers because:
a. the income effect would outweigh the substitution effect of the plan.
b. the substitution effect would outweigh the income effect of the plan.
c. both substitution and income effects would operate to reduce work effort.
d. the plan would make working financially unattractive.
c
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Table 35.1CountryTons of SoybeansComputerChina100300United States150750Based on the information in Table 35.1, assume China and the United States have the same amount of resources with which to produce soybeans and computers and they produce no other goods. The output of computers and soybeans would be greatest if
A. China specialized in producing computers, while the United States specialized in producing soybeans. B. Both countries prohibited trade. C. The United States produced both goods and exported them to China. D. China specialized in producing soybeans, and the United States specialized in producing computers.
The free-rider problem is
A. the incentive that people have to avoid paying for a public good. B. that people cannot be forced to accept public goods. C. the incentive that people have once they are receiving welfare to keep getting welfare. D. the use of private goods in one state by residents of another state.