DrJohnson Receives a Lump Sum Payment of $100 Per Week

question 55

Multiple Choice

Dr.Johnson receives a lump sum payment of $100 per week.Suppose that the first $100 per week of labor income is untaxed but all labor income above $100 is taxed at a rate of 40%.

• A)Dr.Johnson's budget line has a kink in it at the point where he takes 70 units of leisure.
• B)Dr.Johnson's budget line has no kinks in the part of it that corresponds to a positive labor supply.
• C)Dr.Johnson's budget line has slope 23 everywhere.
• D)Dr.Johnson's budget line has a kink where his income is $200 and his leisure is 60 units.
• E)Dr.Johnson's budget line has a piece that is a horizontal straight line.

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Definitions:

Classical Conditioning

A learning process that occurs when two stimuli are repeatedly paired; a response that is at first elicited by the second stimulus is eventually elicited by the first stimulus alone.

Functional Risk

The potential for a product or service to fail to perform its intended function, causing inconvenience or loss to the user.

Directed Learning

A form of learning where the objectives and the process are defined and structured by instructors, teachers, or educational systems.

Actual State-Need

The current condition of an individual that prompts a recognition of a need, leading to a decision-making process to fulfill that need.