Suppose that last year the slope of the AE curve was 0.67 and this year the slope of the AE curve changed to 0.8. Which of the following best describes what happens to the multiplier?
a) it rises from 3 to 5
b) it falls from 5 to 3
c) it rises from 1.25 to 1.49
d) it falls from 1.49 to 1.25
a) it rises from 3 to 5
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Recall the Application. If country A has a lower overall income tax rate than country B, and labor can freely and easily move between the two countries, real wages in country B will tend to ________ and employment in country B will tend to ________
A) decrease; increase B) increase; decrease C) increase; increase D) decrease; decrease
When a government imposes a tariff on imported beer, cooperative surplus ________ and society gets ________
A) increases; richer B) increases; poorer C) decreases; richer D) decreases; poorer
The output level is constant along any isoprofit line.
Answer the following statement true (T) or false (F)
Use the information in Scenario 4.2. What is the price elasticity of demand if the price of artichokes is $10?
A) 0 B) -0.25 C) -1 D) -4 E) negative infinity