Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
Question
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Chapter 18, Problem 1.1P

(a)

To determine

Identify the sources of income.

(a)

Expert Solution
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Explanation of Solution

Unemployment compensation received from the government can be considered as the transfer payments. Thus, $240 received per week as an unemployment compensation is the transfer payments of government.

Economics Concept Introduction

Transfer payments: Transfer payments are payments made by the government to the people who do not contribute anything in the production process.

Unemployment compensation: Unemployment compensation is a transfer payment of government that pays cash benefits for a certain period of time to laid-off workers who have worked for a specified period of time.

(b)

To determine

Identify the sources of income.

(b)

Expert Solution
Check Mark

Explanation of Solution

Dividend from share of stock can be treated as the income earned form property.

Economics Concept Introduction

Property income: Property income is the income earned from the financial holdings and the real property.

(c)

To determine

Identify the sources of income.

(c)

Expert Solution
Check Mark

Explanation of Solution

Earing income in the form rent can be treated as the income earned form property.

Economics Concept Introduction

Property income: Property income is the income earned from the financial holdings and the real property.

(d)

To determine

Identify the sources of income.

(d)

Expert Solution
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Explanation of Solution

Earing income in the form health insurance can be treated as the income earned form wages and salaries in the form of wage supplements.

Economics Concept Introduction

Income from wages and salaries: Income earned from wages and salaries are the portion of personal income.

(e)

To determine

Identify the sources of income.

(e)

Expert Solution
Check Mark

Explanation of Solution

Earing income as an administrative assistant can be treated as the income earned form wages and salaries in the form of wage supplements.

Economics Concept Introduction

Income from wages and salaries: Income earned from wages and salaries are the portion of personal income.

(f)

To determine

Identify the sources of income.

(f)

Expert Solution
Check Mark

Explanation of Solution

Disability payments received from the social security administration can be considered as the transfer payments.

Economics Concept Introduction

Transfer payments: Transfer payments are payments made by the government to the people who do not contribute anything in the production process.

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Students have asked these similar questions
In California, a welfare recipient is eligible for welfare benefits of $645. Benefits are reduced by 50 cents for every dollar of earnings. Consider Elizabeth, a resident of California, who can earn $10 per hour. a. If she works 10 hours, how much are her earnings, how much is her welfare benefit, and how much is her income? b. After Elizabeth works a certain number of hours, she does not receive any benefit at all. What is that number of hours? c. Use your answer to parts a and b to plot her budget constraint. d. Sketch a set of indifference curves consistent with Elizabeth's participating in the labor market
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