A tax elasticity of supply equal to zero indicates that
A. Employers will not hire any workers if tax rates increase.
B. Workers will not cut back on the number of hours worked if tax rates increase.
C. Employers will hire more workers if tax rates increase.
D. Workers will not work at all if tax rates increase.
Answer: B
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A negative externality can be internalized by
A. persuasion. B. the imposition of a tax. C. the assignment of property rights. D. a voluntary agreement. E. all of the above
The profit maximizing condition for a firm selling its output in a competitive market and buying its resources in a competitive market is
A) P = MC only. B) MRP = wage only. C) Both A and B. D) Neither A nor B.
The above figure shows the market for rice in Japan. SDomestic represents the domestic supply curve, and Sworld represents the world supply curve. If a $1 tariff is imposed on imported rice, the change in consumer surplus is
A) c + d. B) c + d +g. C) a + b + c + d. D) f + g.
The notation for panel data is (Xit, Yit), i = 1, ..., n and t = 1, ..., T because
A) we take into account that the entities included in the panel change over time and are replaced by others. B) the X's represent the observed effects and the Y the omitted fixed effects. C) there are n entities and T time periods. D) n has to be larger than T for the OLS estimator to exist.