Suppose employers and workers are risk-neutral, and congress is about to enact the $12 per hour minimum wage. congressional staff economists have urged legislators to consider adopting an earned-income tax credit instead. suppose neither workers nor employers would support that proposal unless the expected value of each party’s economic surplus would be at least as great as under the minimum wage. describe an earned-income tax credit.

The prebisch–singer hypothesis concludes that: a. technology lowers the cost of manufactured products, so developing countries should see an increase in their terms of trade. b. developing countries experience a long-run decline in their terms of trade, as the demand for primary products in higher-income countries declines relative to their demand for manufactured goods. c. because of unfair trading practices, labor in developing countries is exploited. d. opec has been responsible for a slowdown in the world's standard of living.