Taxes on labor income tend to encourage
a. workers to work fewer hours.
b. second earners to stay home
c. the elderly to retire early
d. the unscrupulous to enter the underground economy.
e. all of the above
e. all of the above
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Indirect business taxes refer to
A. dividend taxes paid by the corporation. B. sales and local taxes paid by business. C. payments for low-skilled labor. D. depreciation expenses.
A firm should shut down in the short run if the price is less than the:
A) average fixed cost. B) average total cost. C) average variable cost. D) marginal cost.
If the marginal cost of production is $10, the elasticity of demand for group 1 is -1.5, the elasticity of demand for group 2 is -2.5, and the price paid by group 1 is $15, the price for group 2 is
A) $8.33. B) $27. C) $15. D) Impossible to tell.