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An Individual Has Zero Non- Labour Income and a Wage

Question 18

Multiple Choice

An individual has zero non- labour income and a wage rate of $5 per hour, which allows the individual to attain an indifference curve. If the social objective is to allow the individual to attain a higher indifference curve, then a:


A) lump- sum transfer is the cheapest way to attain the objective.
B) negative income tax is the cheapest way to attain the objective.
C) topping up mechanism is the cheapest way to attain the objective.
D) wage subsidy is the cheapest way to attain the objective.

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