What effect does the payment of government unemployment insurance have on the unemployment rate?
What will be an ideal response?
The payment of government unemployment insurance likely raises the unemployment rate. The unemployment insurance payments lower the opportunity cost (the salary that the unemployed are giving up by not working) of continuing to search for a job, which leads the unemployed to spend more time searching for a job.
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Suppose when you are 21 years old, you deposit $1,000 into a bank account that pays annual compound interest, and you do not withdraw from the account until your retirement at the age of 65, 44 years later. How much more will be in your account if the interest rate is 6 percent rather than 5 percent?
A. $440 B. $4,428 C. $1,549 D. $8,557
You are an economist for the City Subway Commission. Presently, the price of a subway ride is 80¢, and 200,000 seats are filled weekly. The price elasticity of demand for subway rides is -0.40, and the income elasticity of demand is -0.60.
(i) The Commission wants to ensure that the subway has enough excess capacity to handle any extra demand that might occur during an economic decline. If a recession lowered area incomes by 5%, how many additional seats per week would the subway need? (ii) The Commission has just approved a subway price increase of 10¢ per ride. The Commission wants to know if it can use the opportunity to retire two aging subway cars that each provide 8,000 seats weekly. When the price hike goes into effect, can neither, one, or both cars be retired?
The above figure shows Bobby's indifference map for juice and snacks. Also shown are three budget lines resulting from different prices for snacks. Bobby's demand for snacks is
A) unit elastic. B) elastic. C) inelastic. D) perfectly elastic.
When there is a technological advance in the pork industry, consumer surplus in that market will
a. increase. b. decrease. c. not change, since technology affects producers and not consumers. d. not change, since consumers' willingness to pay is unaffected by the technological advance.