Special interest group Z receives a 1/200th slice of the economic pie. Its net benefit from both an economic growth policy and a transfer policy is $60,000. How much does the size of the economic pie (Real GDP) need to grow before group Z is indifferent between the two policies?
A. $300
B. $120,000
C. $120,000,000
D. $12,000,000
E. none of the above
Answer: D
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If you pay $400 in taxes when you earn $10,000 and $600 in taxes when you earn $12,000, you are subject to a marginal tax rate of
A) 4%. B) 5%. C) 6%. D) 8%. E) 10%.
The union representing the bread makers at the Hostess Bread Company went on strike and demanded higher wages than what the firm wanted to pay
I. If the firm is in a competitive labor market the union can only raise wages by decreasing employment. II. If the firm is a monopsony in the labor market the union can only raise wages by decreasing employment. III. If the firm is a monopsony in the labor market the union can both raise wages and increase employment. A) I only B) II only C) I and II D) I and III
To keep employees from shirking, you can invest in greater monitoring
a. even though monitoring is expensive b. especially when monitoring is efficient c. when employees respond well to incentive contracts d. when incentives solve both moral hazard and adverse selection problems with employees
In the traditional Keynesian model, if the government raises taxes, then
A. both consumption and real Gross Domestic Product (GDP) will increase. B. both consumption and real Gross Domestic Product (GDP) will decrease. C. consumption will increase but Gross Domestic Product (GDP) will decrease. D. consumption will decrease but Gross Domestic Product (GDP) will increase.