Employers in a city must pay a specific tax of $t per hour worked by their employees while employers in the suburbs of the city do not have an employment tax. What does a general equilibrium approach predict regarding the wages and employment of both the city and suburban workers if the city decides to substantially reduce their employment tax rate?
A) Wages will increase in the city, but not in the suburbs, and employment will increase in both.
B) Wages will increase in both the city and the suburbs, but employment will fall in both.
C) Wages will increase in both the city and suburbs, employment will increase in the city, but decrease in the suburbs.
D) Wages will increase in both the city and the suburbs, employment will decrease in the city, but increase in the suburbs.
C
You might also like to view...
Refer to Figure 11-1. Using the per-worker production function in the figure above, the largest changes in an economy's standard of living would be achieved by a movement from
A) A to B to C. B) C to B to A. C) B to C to D. D) D to C to B.
The overall decline in death rates in the United States since 1981 was due to all of the following except
A) new surgical techniques. B) a decline in smoking. C) the decline in the population. D) the availability of new prescription drugs.
Comment on the following statement. "Monopolistically competitive firms will still produce in the short run even if the demand curve is below their average variable cost curve because the firms still maintain a degree of market power."
What will be an ideal response?
The total sum of squares is 400 and the sum of squares errors is 100, what is the coefficient of determination?
A) 25 B) 0.75 C) 1.00 D) 0