If a person's labor supply curve is positively sloped, the income effect outweighs the substitution effect.
a. True
b. False
QUESTION 2In order for Mary to qualify for benefits under a means-tested transfer payment program,
a. she must have worked and contributed to the program
b. she must be able to repay the cash transfer at a later date
c. the head of her household must be able to hold a job
d. she must be totally disabled
e. her household's income and/or assets must fall below a certain level
QUESTION 3The demand for labor curve bends backward whenever the income and substitution effects work in opposite directions.
a. True
b. False
QUESTION 4Income assistance programs
a. require that the recipient work and contribute to the program
b. are designed to replace lost income
c. include unemployment compensation and Medicare
d. are funded exclusively by the federal government
e. include both cash and in-kind transfer programs
QUESTION 5Which of the following would be considered leisure?
a. picking strawberries for your own use
b. running a 10-mile training session
c. studying for a college mathematics class
d. changing the oil and oil filter on your car
e. weeding your garden
QUESTION 6Measured in dollar terms, the two largest U.S. antipoverty programs are
a. cash transfers and medical care
b. cash transfers and food assistance
c. food and housing assistance
d. medical care and food assistance
e. medical care and housing assistance
QUESTION 7A college student working in a minimum-wage job has a __________ opportunity cost of __________ than a college dean.
a. lower; market work
b. lower; leisure
c. higher; market work
d. higher; nonmarket work
e. higher; leisure
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