Question

In: Economics

Under a negative income tax program, the government guarantees a minimum level of family income. a...

  1. Under a negative income tax program,
  1. the government guarantees a minimum level of family income.
  2. a family must pay income taxes on its welfare check.
  3. a family receives a stated amount of money from the government plus its members can keep all income earned through work.
  4. the government reduces the welfare payment by any income earned through work.  

2-The marginal revenue product can be written as:

  1. TR/P
  2. w/Q
  3. MP*P
  4. MRP*P

Solutions

Expert Solution

a) Negative income tax system states that people below a specific income level would be given some reimbursement from government or some sort of aid rather than paying tax to the government. It guarantees some level of minimum income to poor individuals thus option A is correct.

b) Option C is correct as Marginal Revenue product gives us the extra value produced by producing a good. Thus marginal product multiplied by price gives us the extra value of good.

Rahul Sunny answered 2 years ago
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