Compensating wage differentials explain some income differences.
Answer the following statement true (T) or false (F)
True
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To help pay for the cost of sport related injuries, the government imposes a tax on sellers of all sports equipment. Using the above figure, the area that equals the lost consumer surplus from this tax on sports equipment is
A) bcd. B) P1P2cd. C) P2P3ec. D) ced.
The All Smiles Greeting Card Company wants to increase the quantity of greeting cards it sells by 20%. If the price elasticity of demand is -5.0, the company must
A. increase price by 0.25%. B. decrease price by 0.25%. C. decrease price by 4.0%. D. increase price by 4.0%.
Comment on the following: "Present-biased people are impatient, but impatient people don't necessarily have to be present-biased."
What will be an ideal response?
Equilibrium in the goods market occurs where
A) real GDP equals nominal GDP. B) aggregate expenditure equals autonomous consumption. C) autonomous consumption equals induced consumption. D) aggregate expenditure equals real GDP.