Scenario 13-3 Tony Is a Wheat Farmer,but He Also Spends Part of Part

question 365

Multiple Choice

Scenario 13-3
Tony is a wheat farmer,but he also spends part of his day teaching guitar lessons.Due to the popularity of his local country western band,Farmer Tony has more students requesting lessons than he has time for if he is to also maintain his farming business.Farmer Tony charges $25 an hour for his guitar lessons.One spring day,he spends 10 hours in his fields planting $130 worth of seeds on his farm.He expects that the seeds he planted will yield $300 worth of wheat.
-Refer to Scenario 13-3.Tony's economic profit equals

• A) $-130.
• B) $-80.
• C) $130.
• D) $170.

Understand the concept and mechanisms of a negative income tax.

Recognize how negative income tax affects families with different incomes.

Identify the effects and implications of minimum wage laws.

Distinguish between different types of welfare programs and their characteristics.

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Definitions:

Money Supply

The entire sum of monetary holdings accessible in an economy at a certain period.

Travelers Checks

Preprinted, fixed-amount checks designed to allow the person signing them to make payments or exchange for local currency, used mainly by travelers to protect against theft or loss.

M1 Balance

The most liquid components of the money supply, including physical currency, demand deposits, and other assets that can quickly be converted to cash.

Currency

A form of currency widely accepted in a specific nation or economic setting.