The income effect of a higher real wage on the quantity of labor supply is the
A) idea that workers feel psychologically wealthier when wages are higher, so they work more.
B) effect that income must rise when wages rise.
C) tendency of workers to supply more labor in response to becoming wealthier.
D) tendency of workers to supply less labor in response to becoming wealthier.
D
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During a "flight to quality"
A) the spread between Treasury bonds and Baa bonds increases. B) the spread between Treasury bonds and Baa bonds decreases. C) the spread between Treasury bonds and Baa bonds is not affected. D) the change in the spread between Treasury bonds and Baa bonds cannot be predicted.
When regulating a natural monopoly, government officials
a. can set an efficient price, but the firm will suffer a loss b. can arrange a Pareto improvement by leaving the firm alone c. should force the firm to set a price equal to minimum marginal cost d. should force the firm to set a price equal to minimum long-run average total cost e. will increase efficiency if they force the firm to produce where MR = MC.
Explain why the government provides public libraries. After all, we can buy books in the free market from firms such as Barnes & Noble
The mayor of Workerville proposes a local payroll tax to fund a new water park for the city. The mayor proposes to collect half the tax from workers and half the tax from firms. Workers will bear
a. an equal share of the tax in comparison to firms. b. a greater share of the tax in comparison to firms. c. a smaller share of the tax in comparison to firms. d. All of the above are possible.