A sharp increase in stock prices makes people much wealthier. If the main effect of this increased wealth is felt on labor supply, what happens to current employment and the real wage rate?
A. Both employment and the real wage rate would increase.
B. Both employment and the real wage rate would decrease.
C. Employment would increase and the real wage would decrease.
D. Employment would decrease and the real wage would increase.
Answer: D
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An external cost is:
A. the cost of a warehouse. B. a cost of production in some other market. C. the economic harm that a positive externality imposes on others. D. the economic harm that a negative externality imposes on others.
The fact that high-income earners tend to earn a higher percentage of their incomes from rent and dividends, in contrast to low-income earners, make the payroll taxes:
A. More progressive B. Proportional C. More regressive D. A flat tax
Low wages and poor working conditions in many U.S. trade partners
A) prove that the gains-from-trade arguments of the Ricardian model are false. B) may be a fact of life, but economists don't care. C) are facts emphasized by U.S. labor in its contract negotiations. D) prove that the gains-from-trade arguments of the Ricardian model are true. E) prove that international trade is exploitative.
The length of time that represents the long run
a. is greater than one year b. is greater than six months c. is longer in service industries than in manufacturing d. is the same for all industries e. varies from industry to industry