Which of the following is NOT a complement for automobiles?
A. Gasoline to run the car
B. Price of the car
C. The insurance for the car
D. The cost of the financing for the car
B. Price of the car
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In the U.S., everyone has to pay social security taxes on labor income until pre-tax income reaches a certain amount after which no additional taxes are due. Consider the case of workers A, B and C who have 60 hours of leisure per week and who earn an hourly wage of $40. Suppose the social security tax is 50% up to a pre-tax weekly income of $1,200 and then falls to zero for any income above $1,200 per week. Assume tastes are homothetic. a. Worker A is observed to work 40 hours per week under this tax system. Is he working more or less than he would if the system were abolished?
b. Worker B is observed to work 30 hours a week under this tax system. Is he working more or less than he would if the system were abolished? c.Worker C is observed to work 20 hours per week under this system. Is he working more or less than he would if the system were abolished? d. Could any of the three workers above share exactly the same tastes? e. For which of these workers is there no deadweight loss from the tax? What will be an ideal response?
"Unions in the United States have helped raise the incomes of union workers as compared to nonunion workers." Do you agree or disagree? Why?
What will be an ideal response?
Which of the following statements is true about a command economy?
a. Shortages occur because of complexities in the planning process. b. Planners determine what, how many, and for whom goods and services are to be produced. c. Planners often allocate goods and services through a rationing system. d. The quality of produced goods and services tends to be inferior. e. All of these are true.
Congress and the president carry out fiscal policy through changes in
A) interest rates and the money supply. B) taxes and the interest rate. C) government purchases and the money supply. D) government purchases and taxes.