Refer to the figure above. If the government was to auction quota licenses competitively, it could earn up to
A) $2000.
B) $5000.
C) $6000.
D) $10000.
C
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Many autoworkers are unionized. Which of the following methods can help them achieve higher wages? I. Training that increases union members' marginal product II. A publicity campaign promoting purchase of union-made automobile
A) I only B) II only C) I and II D) Neither I nor II
Briefly explain the difference between absolute and relative PPP
What will be an ideal response?
In the case of an increase in government spending where the price level varies while the money wage is fixed, output
a. rises and prices fall by more than if the price level was fixed. b. falls and price rise by more than if the price level was fixed. c. rises by more and the price level rises by less than if the price level was fixed. d. and the price level are fixed. e. rises and prices fall by more than if the price level was fixed.
Consider a negative income tax. As discussed in your textbook, under the negative income tax, each person is entitled to a grant of G dollars per month. For every dollar the person earns, the grant is reduced by t dollars. Suppose G = 200 and t = 0.40. Consider an individual whose hourly wage is $10. There are 30 days in a month (so T is 720). Sketch the budget constraint before and after the introduction of a negative income tax.
What will be an ideal response?