The effect of higher wages on the individual supply of labor is ________ and the effect of higher wages on the market supply of labor is ________.
A. ambiguous; to increase the quantity supplied
B. to increase the quantity supplied; ambiguous
C. ambiguous; to decrease the quantity supplied.
D. to decrease the quantity supplied; ambiguous
Answer: A
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Tariffs ________ consumer surplus and import quotas ________ consumer surplus
A) decrease; decrease B) increase; increase C) decrease; increase D) increase; decrease
A positive externality exists and government wants to impose a subsidy in order to bring about an efficient outcome. To accomplish its objective, government must set the subsidy equal to marginal
A. private cost. B. social benefit. C. external cost. D. social cost. E. external benefit.
If a small unit tax is imposed on this market, the effect of this tax on the price suppliers receive will be greatest when: a. d is small and b is large
b. d and b are both small. c. d and b are both large. d. d is large and b is small.
Consider the market for nonalcoholic beers from the previous question. Which of the following is the Bertrand reaction function for Cudweiser?
a. PC = 1 + .033PB b. PC = 1 - .033PB c. PC = 1.5 + .075PB d. PB = 1.5 + .075PC