A decrease in the marginal tax rate, with the average tax rate held constant, will
A) increase the amount of labor supplied at any real wage.
B) not affect the amount of labor supplied at any real wage.
C) decrease the amount of labor supplied at any real wage.
D) increase the amount of labor supplied at any real wage if the average tax rate is above the marginal tax rate, but decrease the amount of labor supplied at any real wage if the average tax rate is below the marginal tax rate.
A
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Suppose milk and cereal are compliments and the demand for milk is Qdm = 40 - 6Pm - 2Pc, where Qdm stands for millions of gallons of milk demanded, Pm stands for the price of milk and Pc stands for the price of cereal. The supply of milk is Qsm = 6Pm - 8, where Qsm stands for millions of gallons of milk supplied. The demand and supply of cereal are Qdc = 90 - 5Pc - Pm and Qsc = 5Pc - 10, respectively, where Qdc stands for millions of boxes of cereal demanded and Qsc stands for millions of boxes of cereal supplied. What is the general equilibrium quantity of cereal?
A. 20.5 million boxes B. Zero boxes C. 38.8 million boxes D. 46.25 million boxes
"Social Security should be privatized to get the government out of the retirement-financing business," is an example of a ________ statement about ________ policy.
A. positive; fiscal B. positive; structural C. normative; structural D. normative; monetary
All profit-maximizing firms chose the level of output at which:
A. MR < P B. P = MC C. MR = P D. MR = MC
Chaletland should _____ interest rates during a recession and _____ interest rates during an economic boom in order to maintain long-run equilibrium.
A) Increase; increase B) Decrease; decrease C) Decrease; increase D) Increase; decrease