Tobacco production is one of the more heavily subsidized industries in the United States. Suppose that as a result of intense lobbying from health-related concerns, Congress repeals the tobacco firms' subsidies. Which of the following scenarios would likely occur?
A) The tobacco firms' supply curve would shift rightward, as it would now be cheaper to produce each level of output.
B) The tobacco firms' supply curve would shift leftward, since it would now cost more to produce each level of output.
C) The tobacco firms would not experience any shift in their supply curves; subsidies don't affect output.
D) There would be a movement along the supply curve for tobacco, but the supply curve would not shift.
B
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Suppose the marginal product of labor in the economy is given by MPN = 0.002(16,000 - N), while the supply of labor is 1000 + 1000w.(a)Find the market-clearing real wage rate and level of employment.(b)What happens to the wage rate and employment if wealth rises, reducing the supply of labor to 500 + 1000w?(c)What happens to the wage rate and employment if after wealth has risen as in part (b), there is a productivity shock that increases the marginal product of labor to MPN = 0.0025(16,000 - N)?
What will be an ideal response?
Clean air is an example of a public good.
Answer the following statement true (T) or false (F)
When an insurance company pays 20% of the bill for health care services, this
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