In the classical model, a tax on capital will
a. increase the demand for labor, the real wage, and output.
b. increase the supply of labor, reduce real wages, and increase output.
c. decrease the demand for labor, the real wage, and output.
d. have no effect on the labor market.
e. increase both labor demand and supply, which will increase output.
C
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AC is lower in the long run than in the short run because
A. prices often fall, allowing savings on purchases. B. inputs can be combined more efficiently in the long run. C. over time the prices of all inputs tend to decrease. D. AFC falls with output over all ranges of output.
If leisure is an inferior good, then an increase in wages will cause workers to work more.
Answer the following statement true (T) or false (F)
Refer to the given table.Price Per UnitColumn A Units Per YearColumn B Units Per Year$4011040$459550$508060$556570$605080 Suppose the columns in this table reflect demand and supply. If the current market price is $50, then you would expect:
A. supply to decrease. B. the market price to rise. C. the market price to fall. D. demand to decrease and supply to decrease.
In an economy experiencing a persistently falling price level:
A. potential GDP will necessarily exceed actual GDP. B. changes in nominal GDP may either overstate or understate changes in real GDP. C. changes in nominal GDP understate changes in real GDP. D. changes in nominal GDP overstate changes in real GDP.