Use the following general linear demand function below:Qd = a + bP + cM + dPRwhere Qd = quantity demanded, P = the price of the good, M = income, PR = the price of a good related in consumption. The law of demand requires that
A. b < 0 and P < 0.
B. b < 0.
C. P < 0.
D. a < 0 and b < 0.
E. a < 0.
Answer: B
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In the long run, the Phillips curve is a ________ at ________
A) horizontal line; 0% inflation B) vertical line; the natural rate of unemployment C) vertical line; the expected rate of inflation D) negatively sloped line; the intersection of aggregate demand and short-run aggregate supply
Lawmakers designed the burden of the FICA payroll tax to be split evenly between workers and firms. Labor economists believe that
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The concept of utility maximization:
A. can be used broadly to think about choices made motivated by satisfaction, envy, status, or kindness. B. assumes each individual seeks to increase his own personal satisfaction regardless of others. C. is solely used to measure an individual's satisfaction with his consumption choices. D. None of these is true.
The ultimate burden of the corporate profits tax appears to depend on all of the following except
A. the ease with which capital and labor can be substituted in the corporate and noncorporate sectors. B. the tax rate structure of the corporate profits tax. C. the relative capital/labor intensity of the corporate and noncorporate sectors. D. the elasticities of demand for the products produced in the corporate and noncorporate sectors.