Assume that a union representative argues that the social security tax is essentially paid for completely by the worker in the form of a lower wage equal to the amount of the tax
If this person were correct what is implicitly assumed to be the shape of the labor supply curve and why? Is this a reasonable assumption? Why or why not?
The implicit assumption is that the labor supply curve is perfectly vertical. That is workers will not change their labor supply decisions when wages change. This appears unlikely because it argues that workers do not respond to changes in incentives which appears unlikely.
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The difference between the market price of a new car used by a firm and the market price of the same car one year later is known as
A) economic depreciation. B) physical depreciation. C) economic deterioration. D) physical deterioration.
A Cobb-Douglas production function is
A) a production function for the textile industry. B) a particular production function that fits the data well. C) a production function applicable in the service industry. D) the production function that Henry Ford applied in his firm.
If the price of inputs falls and the level of consumer indebtedness rises:
a. Aggregate demand and aggregate supply rise. b. Aggregate demand falls, and aggregate supply rises. c. Aggregate demand and aggregate supply fall. d. Neither aggregate demand nor aggregate supply change. e. None of the above.
Firm X owns both tea and coffee plantations. It sells directly to the public. If the firm wants to increase the sales for the coffee, assuming that tea and coffee are substitutes, which of these strategies can it employ?
a. Increase the price for the tea
b. Offer free expedited shipping on the coffee
c. Advertise the tea more heavily
d. Both A&B