In which of the following scenarios would a tax be least likely to affect the amount of labor supplied?
A. A 10 percent tax on the earnings of NFL quarterbacks
B. A 10 percent tax on the earnings of fast-food workers
C. A 10 percent tax increase on the earnings of all workers
D. A 10 percent tax decrease on earnings of construction workers
Answer: A
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Assume that price is greater than average variable cost. If a perfectly competitive seller is producing at an output where price is $11 and the marginal cost is $14.54, then to maximize profits the firm should
A) continue producing at the current output. B) produce a smaller level of output. C) produce a larger level of output. D) There is not enough information given to answer the question.
If the price of apples goes down, then the demand for pears will
A) increase, assuming apples and pears are substitutes. B) decrease, assuming apples and pears are substitutes. C) decrease, assuming apples and pears are complements. D) remain constant, assuming apples and pears are related goods.
The maximum change in the money supply due to an initial change in the excess reserves banks hold is called the:
A. fractional reserve banking system. B. money multiplier. C. required reserve ratio. D. open market operations.
Tie-in sales:
A. are legal under the Clayton Act. B. are the same as predatory pricing. C. were banned under the Hart-Scott-Rodino Act. D. are contracts that prevent purchasing one good without purchasing another.