Give an example where individuals "vote with their feet" in choosing among bundles of public goods and tax rates
What will be an ideal response?
Student responses will vary. The example should discuss some individuals choosing to live in areas with high taxes and large amounts of public goods provided, while others choose to live in areas with low taxes and small amounts of public goods provided.
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If real GDP increases we know for sure that
A) prices have risen but output has remained constant. B) output has risen. C) prices have remained constant. D) prices have risen.
In the classical macroeconomic model, a decrease in the real wage would cause
a. a decrease in the marginal product of labor and an increase in the quantity demanded for labor. b. an increase in the marginal product of labor and an increase in the quantity demanded for labor. c. no change in the quantity demanded for labor. d. an increase in both the supply of and demand for labor.
If a union sets the wage rate to maximize the total wage receipts of its members, the price elasticity of demand for labor would be
A) zero. B) numerically equal to 1. C) finite, but greater than -1. D) positive, but less than 1.
When investment is autonomous, it is independent of the level of national income
Indicate whether the statement is true or false