Refer to Figure 11-2. Diminishing returns to labor set in
A) after L1. B) after L2. C) after L3. D) immediately.
A
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If two families are identical with respect to size, income, general expenses, etc., and are taxed equally, we say that there is
a. horizontal equity. b. vertical equity. c. observance of the ability-to-pay principle. d. intergenerational equity.
The _____ effect states that a lower price level reduces the amount of money people wish to hold. When they lend out their excess savings, the _____ falls causing investment spending to rise and increases the quantity of goods and services demanded
Fill in the blank(s) with correct word
It is not uncommon for businesses to pay contingent bonuses that depend on performance. Contingent bonuses are an example of what the text calls:
A. an incentive-compatible contract. B. a network externality. C. X-inefficiency. D. a winner-take-all contract.
We observe that people buy less steak and more potatoes when the price of steak relative to potatoes increases. This indicates that steak and potatoes are
A) substitutes. B) complements. C) inferior goods. D) unrelated goods.