Minimum wage creates a(n) ______ of low-skilled workers.
a. scarcity
b. equilibrium
c. surplus
d. shortage
c. surplus
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Use the figure below to answer the following question.
By how much does total Economic Surplus decrease after the tax is imposed?
A. $32 B. $4 C. $38 D. $2
When the government taxes a good or service, it
A) increases consumer surplus for the good or service. B) increases producer surplus for the good or service. C) eliminates the deadweight loss associated with the good or service. D) affects the market equilibrium for that good or service.
Suppose Larry's Lariats produces lassos in a factory, and uses nine feet of rope to make each lasso. The rope is put into a machine that automatically cuts it to the right length, then seals the ends to prevent fraying. The rope is then hand tied, dipped, and wound before being placed in a packaging machine to prepare it for retail sale. Which of the following would be considered a fixed cost for this company?
A. Employee wages B. The cost of rope C. The packaging material D. None of these would be considered a fixed cost.
Setting performance goals based on historical data and past performance creates:
A. a ratchet effect. B. a compensating differential. C. opportunism. D. the horizon problem.