Explain why indifference curves have the following properties: (a) downward slope (b) convex to the origin (c) higher curves reflect higher utility (d) non-intersecting
What will be an ideal response?
(a) Compensation required for the loss of any one good from the bundle
(b) Bundles with balanced quantities are preferred
(c) More is preferred to less
(d) Maintenance of transitivity of preferences
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Suppose the federal government allows labor unions to act as the sole seller in labor markets, but the government collects a $1 per hour fee to cover unemployment insurance for each union worker
Assuming this fee is not so large that it forces the unions to disband, what is the impact of this fee on the equilibrium wage and employment level in the monopolized labor market? A) After-tax wages and employment decline. B) After-tax wages increase and employment declines. C) Employment increases and after-tax wages decline. D) No change in after-tax wages or employment levels.
If the price of a foreign currency rises, we say there has been an appreciation of the domestic currency
a. True b. False
Other things equal, the unemployment rate rises if
A. the supply of labor increases. B. aggregate demand increases. C. aggregate output increases. D. the demand for labor increases.
What is game theory and what light does it shed on the issues faced by duopolists?
What will be an ideal response?