Answer the following questions true (T) or false (F)
1. Suppose the extra annual cost to a nation to enact a mandatory seat belt law for motorcycles is $850. Then, the nation should enact this seat belt law if doing so results in an additional benefit of $850 or more each year.
2. The government makes all economic decisions in a mixed economy.
3. When voluntary exchange takes place, both parties gain from the exchange.
1. TRUE
2. FALSE
3. TRUE
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As the real wage increases, the quantity of labor demanded ________ and the quantity of labor supplied ________.
A. increases; increases B. decreases; decreases C. decreases; increases D. increases; decreases
The deadweight loss from a tax
A) is the tax revenue the government collects when people die. B) is the split of a tax between the amount paid and the amount collected. C) equals the amount collected as revenue from the tax. D) is called the excess burden of the tax. E) equals the amount collected as revenue from the tax plus the excess burden of the tax.
Which of the following algebraic forms for a demand curve yields an isoelastic demand curve?
A) Q = a - b log(P) + c log(I) B) Q = a - bP + cI C) log(Q) = a - b log(P) + c log(I) D) log(Q) = bP + cI
Good assumptions simplify a problem without substantially affecting the answer
a. True b. False Indicate whether the statement is true or false