If the minimum wage law sets a wage floor below the equilibrium wage in the market for unskilled labor, then the
A) minimum wage will create a surplus of unskilled labor.
B) minimum wage will create a shortage of unskilled labor.
C) minimum wage will not impact the unskilled labor market.
D) unskilled labor market will change, but we cannot be certain how.
C
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State and local governments receive most of their revenue from
A) sales and excise taxes, revenue from the federal government, and property taxes. B) individual income taxes, social insurance contributions, and property taxes. C) corporate income taxes, property taxes, and personal income taxes. D) property taxes, sales and excise taxes, and Social Security contribution.
The government can both set the efficient level of output in a market and maximize surplus by correcting for a negative externality by using:
A. a tariff. B. a subsidy. C. a tradable allowance. D. a quota.
The amount of deadweight loss that results from a tax of a given size is determined by
a. whether the tax is levied on buyers or sellers. b. the number of buyers in the market relative to the number of sellers. c. the price elasticities of demand and supply. d. the ratio of the tax per unit to the effective price received by sellers.
In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X. A decrease in the number of consumers of product X will:
A. increase D, increase P, and increase Q. B. decrease S, decrease P, and decrease Q. C. decrease D, decrease P, and increase Q. D. decrease D, decrease P, and decrease Q.