Economists believe that lower taxes should reduce unemployment because:
A. people have more incentive to find a job, knowing they will keep more of the income they earn from the job when taxes are low.
B. people will not want to miss out on the opportunity to keep more of the income they earn when taxes are lower, so they will have an incentive to keep their job and not quit.
C. people have more incentive to be productive if the money they earn is not being taxed as much when taxes are low.
D. None of these is true.
A. people have more incentive to find a job, knowing they will keep more of the income they earn from the job when taxes are low.
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When you buy a corporate bond, you are
A. borrowing funds from the corporation. B. lending funds to the corporation. C. selling an ownership right in the corporation. D. acquiring an ownership right in the corporation. E. b and d
As macroeconomic conditions improve and consumers' incomes and wealth increase, their demand for many products tends to become ________ price inelastic. As such, the ability of firms to mark up price above cost will ________
A) more; increase B) more; decrease C) less; increase D) less; decrease
The “law” of diminishing returns
A. is deduced from the basic biochemical relationship of agricultural theory. B. was constructed as the basis of observation during experiments on the impact of fertilizer on output in the 1930s. C. is based on regular observations of input-output relationships over the last two centuries. D. is borrowed from physical laws related to conversion of matter and energy.
If a competitive firm’s short-run average cost curve lies above the price of the product, we can conclude that the firm
A. is earning a huge profit. B. is incurring losses. C. is earning zero economic profits. D. is earning a normal profit.