Recall the Application. If country A has a lower overall income tax rate than country B, and labor can freely and easily move between the two countries, real wages in country B will tend to ________ and employment in country B will tend to ________
A) decrease; increase B) increase; decrease C) increase; increase D) decrease; decrease
B
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If a perfectly competitive market is in long-run equilibrium and there is a permanent decrease in demand, then
A) some firms will incur economic losses. B) firms are no longer maximizing profits. C) some firms must immediately exit. D) each firm must produce less output in the new long run equilibrium and earn less economic profit.
A natural monopoly
a. is a monopoly in the production of raw materials. b. occurs when one firm can supply the entire market more cheaply than can a number of firms. c. is one result of a patent. d. results from decreasing returns to scale.
The capital stock is fixed at 50 units, the price of capital is $30 per unit, and the price of labor is $25 per unit. 
Given the above, if the firm produces 30 units of output, how many units of labor does the firm use?
A. 54 B. 45 C. 30 D. 60 E. none of the above
Refer to Figure 6.6, which shows a market for taxi medallions. If the number of taxi licenses is reduced from Q2 to Q1, the decrease in total surplus of the market is represented by:
A. area FGI. B. area GHI. C. area FHI. D. area BDFH - area FHI.