If unemployment has been consistently higher than normal (full employment level), real GDP is

The graph shown demonstrates a tax on buyers. Which of the following can be said about the effect of this tax?

A. The price paid by buyers is greater than that received by sellers, and the difference is the tax wedge.
B. The price paid by buyers is less than that received by sellers, and the difference is the total tax revenue.
C. The price paid by buyers is greater than that received by sellers, and the difference is the total tax revenue.
D. The price paid by buyers and received by sellers is higher than it was before the tax was imposed.

The federal minimum wage law seeks to

a. maximize employment for low wage occupations. b. shift employment from low wage to high wage industries. c. create a floor for wages. d. index wages to the CPI.

In a simple macroeconomic model, only one component of expenditures is allowed to change:

a. investment. b. consumption. c. net exports. d. government spending. e. transfer payments.

What conditions must exist in order for a pure monopolist to achieve economic profits? Is the profitability of a firm’s operation a good index of the degree of monopoly power it possesses?

What will be an ideal response?