The government announces a tax increase on workers' wages to take effect in the future. What happens to current employment and the real wage rate?
A) Both employment and the real wage rate would increase.
B) Both employment and the real wage rate would decrease.
C) Employment would increase and the real wage would decrease.
D) Employment would decrease and the real wage would increase.
C
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An increase in aggregate demand in the long run, will change:
A. both output and the price level. B. output but not price level. C. neither output nor the price level. D. the price level but not output.
If a decrease in income leads to a decrease in the demand for ice cream, then ice cream is
A) a normal good. B) a neutral good. C) a complement. D) a necessity.
Marginal cost is the ________ one more unit of a good and ________ of the good increases
A) opportunity cost of producing; increases as production B) opportunity cost of producing; decreases as production C) price that must be paid to consume; increases as consumption D) price that must be paid to consume; decreases as consumption
Suppose that firms in the chemical industry are allowed, free of charge, to dump harmful products into rivers. If this is the case in a competitive market, how will the price and output of the chemical products compare with their values under conditions of ideal economic efficiency?
a. Price is too low; output is too large. b. Price is too high; output is too large. c. Price is too low; output is too small. d. Price is too high; output is too small.