Given the marginal-utility-to-price ratio equalization principle, if MU1/P1 > MU2/P2,
a. the consumer should consume more of good 1 and less of good 2
b. the consumer should consume more of good 2 and less of good 1
c. total utility of good 1 is greater than total utility of good 2
d. total utility of good 2 is greater than total utility of good 1
e. the price of good 1 must fall
a. the consumer should consume more of good 1 and less of good 2
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What does empirical evidence suggest about the elasticity of labor supply? What does this suggest about the burden of the payroll tax in the United States?
What will be an ideal response?
A tax placed on buyers of tuxedoes shifts the
a. demand curve for tuxedoes downward, decreasing the price received by sellers of tuxedoes and causing the quantity of tuxedoes to increase. b. demand curve for tuxedoes downward, decreasing the price received by sellers of tuxedoes and causing the quantity of tuxedoes to decrease. c. supply curve for tuxedoes upward, decreasing the effective price paid by buyers of tuxedoes and causing the quantity of tuxedoes to increase. d. supply curve for tuxedoes upward, increasing the effective price paid by buyers of tuxedoes and causing the quantity of tuxedoes to decrease.
The idea of paying workers an efficiency wage is that
a. employers will find it profitable to hire more workers. b. workers receive wages consistent with their specific compensating differentials. c. workers and management gain at the expense of the stockholders of the company. d. workers have the incentive to work harder, thus increasing their marginal productivity.
Minimum-wage laws can keep wages
a. above equilibrium and cause a surplus of labor. b. above equilibrium and cause a shortage of labor. c. below equilibrium and cause a surplus of labor. d. below equilibrium and cause a shortage of labor.