Adoption of a guaranteed annual income with benefits (B) given by ...

[danielfitts88]

Adoption of a guaranteed annual income with benefits (B) given by B = 20,000 -.5 (earnings) would be expected to reduce work effort by low wage workers because:
 a. the income effect would outweigh the substitution effect of the plan.
  b. the substitution effect would outweigh the income effect of the plan.
  c. both substitution and income effects would operate to reduce work effort.
  d. the plan would make working financially unattractive.

Question 2

Progressive Insurance's 'Tripsense' monitors driving patterns of the people who purchase the related insurance policy. This lowers insurance costs because
 a. only more reckless drivers will accept the device
  b. drivers will want to drive more carefully now
  c. drivers will believe they can now drive more recklessly
  d. it does not affect care in driving

[elyse44]

Answer to Question 1

c

Answer to Question 2

b

[danielfitts88]

Excellent

[Alyson.hiatt@yahoo.com]

Gracias!