Assume Ford Motor company purchases a robot that can do the welding work of ten union workers. If the robot is a perfect substitute for labor what can we be sure is true about the annual cost of using and maintaining one robot?
What will be an ideal response?
The annual cost would have to be less than ten times the annual salary and benefits of one union worker. If it were any more expensive than that it would make more sense to keep the union workers and get rid of the robot.
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Suppose that a change in the fiscal/monetary policy mix shifts the IS and LM curves downward by exactly the same amount. The ________ in national saving is accompanied by ________ domestic investment due to the ________ in the interest rate
A) fall, equally lower, lower B) fall, unchanged, unchanged C) rise, unchanged, unchanged D) rise, equally higher, lower E) rise, equally lower, higher
What are the two important programs in practice in America that strongly resemble a negative income tax?
What will be an ideal response?
Which of the following is NOT related to the government's political function of income redistribution?
A. providing money transfer payments B. in-kind transfers C. Social Security D. excise tax on cigarettes
If a firm is currently in short-run equilibrium earning a profit, what impact will a lump-sum tax have on its production decision?
A) The firm will decrease output to earn a higher profit. B) The firm will increase output but earn a lower profit. C) The firm will not change output but earn a lower profit. D) The firm will not change output and earn a higher profit.