An inverse relationship exists when:
a. there is no association between two variables.
b. one variable increases and there is no change in the other variable.
c. one variable increases and the other variable increases.
d. one variable increases and the other variable decreases.
d
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Suppose that all workers place a value on their leisure of 75 goods per day. The production function relating output per day Y to the number of people working per day N is
Y = 500N - 0.4 N2, and the marginal product of labor is MPN = 500 - 0.8 N. A 25% tax is levied on wages. (a) How much is output per day? (b) In terms of lost output, what is the cost of the distortion introduced by this tax?
The most preferred solution for reducing cyclical unemployment is to: a. minimize recessions
b. provide unemployment benefits. c. provide food stamps. d. implement zoning laws.
A person who is willing to take a bet with an expected value of one is called risk-neutral.
Answer the following statement true (T) or false (F)
Answer the following statements true (T) or false (F)
1. The government is like business firm in that it provides goods and services to households and businesses. 2. Transfer payments are "exhaustive" in that they directly absorb resources, whereas government purchases are "nonexhaustive". 3. When the government is doing "deficit spending," it will be increasing its total debt. 4. The largest category of Federal government expenditures is national defense. 5. Payroll taxes account for more than one-third of Federal tax revenues.