A $1996$ bill reforming the federal government's antipoverty programs limited many welfare recipients to only $2$ years of benefits.

How does this change affect the incentives for working?

The percentage of people in a particular group who live in households below the official poverty threshold _____

The Social Security system provides income for people over age $65$. If a recipient of Social Security decides to work and earn some income, the amount he or she receives in Social Security benefits is typically reduced.

a. How does the provision of Social Security affect people's incentive to save while working?

b. How does the reduction in benefits associated with higher earnings affect people's incentive to work past age $65$?

The company that you manage has invested $5 million in developing a new product, but the development is not quite finished. At a recent meeting, your salespeople report that the introduction of competing products has reduced the expected sales of your new product to$3 million. If it would cost $1 million to finish development and make the product, should you go ahead and do so? What is the most that you should pay to complete development?

"A recent bill reforming the government’s antipoverty programs limited many welfare recipients to only two years of benefits.

How does this change affect the incentives for working?"

You are trying to decide whether to take a vacation. Most of the costs of the vacation (airfare, hotel, and forgone wages) are measured in dollars, but the benefits of the vacation are psychological. How can you compare the benefits to the costs ?

You are trying to decide whether to take a vacation. Most of the costs of the vacation (airfare, hotel, and forgone wages) are measured in dollars, but the benefits of the vacation are psychological. How can you compare the benefits to the costs ?

You win $\$ 100$ in a basketball pool. You have a choice between spending the money now and putting it away for a year in a bank account that pays $5$ percent interest. What is the opportunity cost of spending the $\$ 100$ now?

You are trying to decide whether to take a vacation. Most of the costs of the vacation (airfare, hotel, and forgone wages) are measured in dollars, but the benefits of the vacation are psychological. How can you compare the benefits to the costs?

The company that you manage has invested $\$ 5$ million in developing a new product, but the development is not quite finished. At a recent meeting, your salespeople report that the introduction of competing products has reduced the expected sales of your new product to $\$ 3$ million. If it would cost $\$ 1$ million to finish development and make the product, should you go ahead and do so? What is the most that you should pay to complete development ?

Kayla can cook dinner in 30 minutes and wash the laundry in 20 minutes. Her roommate takes half as long to do each task. How should the roommates allocate the work?

a. Kayla should do more of the cooking based on her comparative advantage.

b. Kayla should do more of the washing based on her comparative advantage.

c. Kayla should do more of the washing based on her absolute advantage.

d. There are no gains from trade in this situation.

Kayla can cook dinner in 30 minutes and wash the laundry in 20 minutes. Her roommate takes twice as long to do each task. How should the roommates allocate the work? a. Kayla should do more of the cooking based on her comparative advantage. b. Kayla should do more of the washing based on her comparative advantage. c. Kayla should do more of the washing based on her absolute advantage. d. There are no gains from trade in this situation.

The circular-flow diagram illustrates that, in markets for the factors of production,

a. households are sellers, and firms are buyers.

b. households are buyers, and firms are sellers.

c. households and firms are both buyers.

d. households and firms are both sellers.

A marginal change is one that a. is not important for public policy. b. incrementally alters an existing plan. c. makes an outcome inefficient. does not influence incentives.