Recall the Application about the incentives to install rooftop solar panels to answer the following question(s).According to the Application, a 10 percent increase in the tax credits for solar panels results in an increase in the number of households that install solar panels by 7.6 percent. The increase in sales due to this subsidy is an example of which element of the economic way of thinking?
A. responding to incentives
B. isolating variables
C. thinking at the margin
D. using assumptions to simplify
Answer: A
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According to classical economists, the increase in the unemployment rate in recessions occurs because
A) aggregate demand is insufficient. B) the time needed to find a job rises in recessions. C) labor unions prevent firms from cutting wages. D) firms will replace workers by machines.
A 14-day training and workshop initiative undertaken by a manufacturing firm improves the productivity of its workers and increases its monthly production. This results in a(n): a. upward movement along the demand for labor curve. b. rightward shift of the demand for labor curve
c. leftward shift of the demand for labor curve. d. downward movement along the demand for labor curve.
Suppose the actions of the producers of a good impose an external cost which results in the actual market price of $18 and market output of 400 units. How does this outcome compare to the efficient, ideal equilibrium?
a. The efficient price would higher than $18 while the efficient output would be less than 400 units. b. The efficient price would be higher than $18 while the efficient output would be greater than 400 units. c. The efficient price would be lower than $18 while the efficient output would be less than 400 units. d. The efficient price would be lower than $18 while the efficient output would be greater than 400 units.
Other things being equal, the lower the value of elasticity:
A. the more likely the profitability of a price increase. B. the less likely the profitability of a price increase. C. the greater the responsiveness in quantity demanded to a price change. D. the lower the corresponding increase in firm revenue.