If the tax function is given by T = – 20 + 0.1Y the average tax rate would
a. be 0.1.
b. fall as income falls.
c. vary negatively with income.
d. be – 20 + 0.1.
e. none of the above
B
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In the figure above, in the market for low-skilled labor, the equilibrium wage rate is
A) $16. B) $8. C) $20. D) $28.
During October and November 2008, gasoline prices were falling dramatically, making travel by car less expensive but air travel prices were as high as ever. What is TRUE about consumer preferences, possibilities, or choices?
A) The relative price of air travel in terms of travelling by car decreases. B) If travelling by car is a normal good, both the substitution and income effects would lead to a decrease in travelling by car. C) The consumers' budget line would shift outward and its slope would not change. D) If air travel is a normal good, both the substitution and income effects would lead to an increase in air travel.
Which of these statements is generally accepted by economists? Perfect competition
A) provides both equity and efficiency. B) provides equity but not necessarily efficiency. C) provides efficiency but not necessarily equity. D) generally satisfies neither efficiency nor equity.
In order for a production possibilities curve to shift to the right, which of the following must occur?
A) government involvement B) increasing consumer wants C) economic growth D) reductions in the supply of resources