An increase in the marginal tax on labor income, increases the supply of labor.
a. true
b. false
Ans: b. false
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Which of the following is a FALSE statement concerning purchasing power parity?
A) Purchasing power parity states that dollars will tend to exchange for pounds at a rate that maintains a constant purchasing power of a given quantity of a currency. B) Over the long term, a Big Mac in New York will tend to cost the same as a Big Mac in London. C) There should not be significant deviations in the long-run value of purchasing power parity. D) Over the long run, purchasing power parity exerts influence over exchange rates. E) An overvalued dollar buys more in Britain than it does in the United States.
Suppose a patent applicant approaches an insurance company and seeks to purchase an insurance policy that her patent will not net $1m in the next three years. The insurance company
A) will sell her an insurance policy because the proposal entails uncertainty not risk. B) will sell her an insurance policy because the proposal entails risk not uncertainty. C) will not sell her an insurance policy because the proposal entails uncertainty not risk. D) will not sell her an insurance policy because the proposal entails risk not uncertainty.
The cross-price elasticity of demand for peanut butter and jelly is likely:
A. a positive number. B. a very high positive number. C. a negative number. D. less than one.
According to Friedman's "permanent income hypothesis,"
A. Consumption today is based on income today. B. Consumption for future periods is based on today's income. C. Income is never permanent because of the government's ability to tax. D. Consumption depends on a person's expected income stream over time.