Which of the following is not advantage of a negative income tax? ...

[mikaylakyoung]

Which of the following is not advantage of a negative income tax?
 
  a. A negative income tax is simple to administer.
  b. A negative income tax is equivalent to a cash transfer.
  c. A negative income tax retains the paternalistic nature of in-kind transfers.
   d. A negative income tax could replace many transfer programs.

Question 2

If the income elasticity of potatoes is -0.7, then the income effect caused by a price decrease of potatoes
 
  A) tends to increase the consumption of potatoes.
  B) tends to decrease the consumption of potatoes.
  C) is less than the substitution effect.
  D) None of the above.

[Meganchabluk]

Answer to Question 1

c

Answer to Question 2

B