Why might an automobile labor union lobby Congress to place tariffs on labor-saving devices like automated welding and riveting machines? Why might this be a mistake?
What will be an ideal response?
The automobile union may lobby Congress to place tariffs on these devices because it views them as a substitute for their labor. While this may be true it is overlooking the fact there is also an output effect at work at the same time, which may actually allow the automobile manufacturer to hire more workers.
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Farmer Ken in Kentucky can raise either 80 pounds of tobacco or 40 bushels of cotton on an acre. Farmer Calvin in California can raise either 150 pounds of tobacco or 50 bushels of cotton on an acre. Which farmer can produce tobacco more efficiently?
a. Farmer Ken in Kentucky. b. Farmer Calvin in California. c. The two farmers are equally efficient at growing wheat. d. More information is needed to determine comparative advantage.
A subsidy is a negative tax
Indicate whether the statement is true or false
Suppose that only 2 percent of all people are geniuses. If an IQ test indicates that Albert is a genius, but the test is only accurate 90 percent of the time, then the probability that Albert really is a genius is roughly:
A. 18 percent. B. 16 percent C. 10 percent. D. 2 percent.
Table 5.2National Income Accounts (dollar figures are in billions)Expenditures for consumer goods and services$2,850Exports$300Government purchases of goods and services$810Social Security taxes$295Net investment$510Indirect business taxes$445Imports$450Gross investment$700Corporate income taxes$190Personal income taxes$875Corporate retained earnings$210Net foreign factor income$0Government transfer payments to households$780Net interest payments to households$20On the basis of Table 5.2, disposable income is
A. $2,805 billion. B. $4,480 billion. C. $3,680 billion. D. $3,490 billion.