True of False 1 In a moral hazard problem the agent is unabl

True of False?

1. In a moral hazard problem, the agent is unable to perfectly monitor the principal’s behavior so the principal applies less effort than the agent considers desirable.

2. A typical indifference curve is upward sloping.

3. John Rawls, who developed the way of thinking called liberalism, argued that government policies should be aimed at maximizing the sum of utility of everyone in society.

4. Critics argue that a disadvantage of the Earned Income Tax Credit is that it does not effectively target the working poor because many recipients are the teenage children of middle-income families.

5. Critics argue that a disadvantage of minimum-wage laws is that they do not effectively target the working poor because many minimum-wage workers are the teenage children of middle-income families.

Solution

Answer:

Answer: False

Because it considers undesirable

2. A typical indifference curve is upward sloping

Answer: false

Because generally a indifference curve is downwards sloping and convex to the origin as in a combination of two commodities to increase units of one commodity we have to reduce units another commodity.

3. John Rawls, who developed the way of thinking called liberalism, argued that government policies should be aimed at maximizing the sum of utility of everyone in society.

Answer: true

4. Critics argue that a disadvantage of the Earned Income Tax Credit is that it does not effectively target the working poor because many recipients are the teenage children of middle-income families.

Answer: false

Because Earned income tax credit mainly works for low and middle class families and provides larges credit to family with more number children

5. Critics argue that a disadvantage of minimum-wage laws is that they do not effectively target the working poor because many minimum-wage workers are the teenage children of middle-income families.

Answer: true