Refer to the figure above. If there is wage rigidity in the market, how much unemployment is created when the labor demand curve shifts to LD2?
A) 20 units of labor B) 30 units of labor C) 10 units of labor D) 40 units of labor
A
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Suppose the government levies a per-unit tax on TVs, and this tax increases the price of TVs by $100. Model TVs as x1 and all other goods as a composite good x2. a. For a consumer with income I, write down an equation for the before-tax budget line. b. Write down the after-tax budget line equation. c. Suppose you know the bundle on the after-tax budget that is chosen by the consumer contains 3 TVs. How much in tax revenue is the government raising from this consumer? d. If the government replaced the tax on TVs with a lump sum tax that does not alter any prices but raises the same amount of revenue from the consumer, how would this change the consumer's budget line equation?
What will be an ideal response?
What is an economic model?
A) It is a simplified version of some aspect of economic life used to analyze an economic issue. B) It is a description of an economic issue that includes all possible related information. C) It is a detailed version of some aspect of economic life used to analyze an economic issue. D) It is a description of an economic issue based on official government information.
Stores such as Costco and Sam's Club require an annual membership before you can shop there. This is a form of
A) two-part pricing. B) price gouging. C) tie-in sales. D) anti-competitive behavior.
Specialization and exchange
a. generally leads to increased production of some goods at the cost of decreased production of other goods b. causes the production possibilities frontier to shift inward c. increases total production of every good only if the total amount of resources also increases d. alters the allocation of production among individuals or nations, but does not alter total production levels e. allows greater total production of every good without an increase in the total amount of resources