Employers will bear the full burden of the payroll tax if labor supply is
A. upward sloping.
B. perfectly elastic.
C. perfectly inelastic.
D. backward bending.
Answer: B
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For a monopolist to earn a positive economic profit, price has to exceed average total cost at the level of output at which marginal revenue equals marginal cost
Indicate whether the statement is true or false
The elasticity of demand for labor will be less the
A) longer the time period. B) easier it is to substitute one input for another. C) less the demand elasticity for the final product. D) larger the share of total costs accounted for by labor.
The combined effect on the loanable funds market of a new technology that increases the marginal physical product of capital and a shift in consumers' preferences for more present consumption is
a. an increase in the interest rate b. a decrease in the interest rate c. unclear because each of the effects has an opposite influence on the interest rate d. an increase in the quantity of loanable funds demanded and supplied on the market e. a decrease in the quantity of loanable funds demanded and supplied on the market
Substitution bias occurs because the CPI ignores the possibility of consumer substitution toward goods that have become relatively less expensive
a. True b. False Indicate whether the statement is true or false