Suppose That a Worker in Country a Can Make Either

question 38

Multiple Choice

Suppose that a worker in Country A can make either 10 iPhones or 5 iPads each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPhones or 10 iPads each year. Country B has 200 workers. Country A would be using resources efficiently if it was producing:

• A) (500 iPhones, 100 iPads).
• B) (500 iPhones, 150 iPads).
• C) (500 iPhones, 200 iPads).
• D) (500 iPhones, 250 iPads).

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Definitions:

Earned Income Tax Credit

A refundable tax credit for low- to moderate-income working individuals and families, designed to encourage and reward work.

Negative Income Tax

A tax system where people earning below a certain amount receive supplemental pay from the government instead of paying taxes.

Government Intervention

Actions taken by government to influence or regulate economic activity, often to correct market failures and promote welfare.

Negative Income Tax

A system of income support that provides individuals with an income guarantee. If an individual's earnings fall below a certain level, they receive supplemental pay from the government rather than paying taxes.