Breakfast anyone? Which of the following pairs best represents complementary goods?
a. bacon and saugage
b. butter and margarine
c. bacon and eggs
d. toast and rolls
e. coffee and tea
C
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Explain the factors that determine the incidence of the payroll tax. Illustrate your answer using graphs
In the United States, who bears most of the payroll tax employers or workers? Why? (Hint: draw two separate supply and demand curves for labor. Show one with a relatively elastic supply for labor and one with a relatively inelastic supply).
Refer to the above figure. Assume that B is the current long-run aggregate supply (LRAS) curve and that E is the current short-run aggregate supply (SRAS) curve
If a new discovery of large oil fields in Florida led to an increase in the nation's productive capacities, then we could expect the LRAS curve and the SRAS curve to A) remain B and E. B) move to A and D. C) move to C and F. D) move to A and F.
Which of the following is unique to perfect competition?
a. The individual firm cannot earn economic profit in the long run. b. It is easy for new firms to enter the industry. c. The market demand curve slopes downward. d. The demand curve facing an individual firm is perfectly elastic. e. The firms in the industry produce a homogeneous product.
The effect of a compensated price change is known as:
A. the price effect of a price change. B. the income effect of a price change. C. the substitution effect of a price change. D. the replacement effect of a price change.