ECO2023 Micro

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The demand for labor and other factors of production typically declines in a recession because those factors

Are derived from the demand for final output, which also declines in a recession

Social insurance programs are

Event conditional

The size distribution of income best measures the answer to the

For whom question

If we just dropped below $100 per., The firm depicted on the above figure should

Hire more workers

A tax structure is called progressive when

I income groups pay more taxes absolutely than do low income groups

Workers typically require higher wages in order to work additional hours because of the

Increase in value of leisure time for gone

The fact that landlords are able to pass the majority, but not all, of the burden of property taxes on the renters suggest that the price elasticity of demand for apartments is

Inelastic

A college graduate who works at a firm is also working part time on a masters degree in business and expects to be paid a higher wage after earning the degree. The basic reason for this wage differential is

Investment in human capital

The long run average total cost curve of a natural monopolist

Is always above the marginal cost curve in the relevant range of production

A natural monopoly is a desirable market structure because

It can offer the products consumers want at the lowest possible price because of economies of scale

The marginal revenue product of labor curve is the firms

Labor demand curve

Compared with the profit maximizing choice of a natural monopolist, outpu regulation will result in a

Lower level of output and a higher price

The cost efficiency of labor is equal to the

MPP of labor divided by the wage rate

The change in total revenue associated with one additional unit of input measures labor's

MRP

To maximize profits, a natural monopolist produces the level of output at which

Marginal revenue equals marginal cost

If an individual is taxed at a 30% rate for each extra dollar earned the references to the

Marginal tax rate

The number of hours that a worker is willing to work is determined by the trade off between the increasing

Marginal utility of leisure and the decreasing marginal utility of income

Market failure includes

Market power resulting in reduced output and higher price

The log diminishing returns states that the MPP of labor declines

More labor is employed

An unregulated natural monopolist will

Produce where MR equals MC

The labor supply curve depicts the

Quantities of labor supplied at alternative wage rates

Other things being equal, which of the following would increase the market demand for labor?

An increase in the marginal productivity of labor

A form of gov intervention that is designed to correct market failures

Antitrust laws

Which would shift the market demand for labor

The marginal physical product, the demand for final products, the productivity for labor

Assume that the marginal tax rate is 10% for the first $15,000 of income, 20% for income between $15,000 and $45,000, and 30% for any income over $45,000. If Miss Brown had taxable income and equal to $62,000 for 2001, what was her tax bill

$12,600

Assume the marginal tax rate is 12% for the first $40,000 of income. 20% for income between $40,000 and $100,000 and 30% Franny income over $100,000. If Mr. Smith had taxable income equal to $120,000 for 2001, what was his tax bill

$27,600

A progressive tax is

A tax system in which your tax rates rise as income rises

Too many loopholes in the federal income tax system prior to the 1986 tax reform

All of the above

Cost efficiency refers to the

Amount of output associated with an additional dollar spent on input

The marginal revenue product of labor is equal to

Change in total revenue divided by change in quantity of labor

The cost that firms incurred to learn about the regulations in their industry are referred to as:

Compliance costs

Suppose that Sylvia's dance studio uses both labor and capital to teach dance lessons. Given her current makes of labor and capital, the cost efficiency of labor is five dance lessons per dollar and the cost efficiency of capital is one dance lesson per dollar. Sylvia should

Decrease the number of workers employed in that industr

The demand for factors of production is

Derived from the demand for the goods and services they produce

If they cost efficiency of labor equals two then

Each extra dollar spent on wages returns two units of additional output

State and local government's generate most of their revenues through

Sales in property taxes

By instituting a sales tax, a tax plan would

Shift the Lorenz curve for after-tax income away from absolute equality

The federal income tax is designed to

Shift the Lorenz curve inward

What is skilled workers generally earn more than unskilled workers

Skilled labor has higher marginal revenue product than unskilled labor

If Reggie's substitution effect outweigh his income affects his labor supply curve will

Slope upwards

The individual firm which hires labor under competitive conditions faces a labor supply curve which

Slopes downward to the right

At the point were income and effects outweigh substitution effects the labor supply

Starts to bend backwards

When people are standing in line for jobs and there are more applicants and jobs, then the labor market is characterized by a

Surplus of labor

Other things being equal a profit maximizing employer will employ additional labor as long as

The MRP of labor exceeds the wage rate

Which of the following is a payroll tax

The Social Security tax

And upward sloping labor supply curve illustrates

The direct relationship between quantity of labor supplied at the wage rate

Which of the following statements regarding the distribution of money income is most correct

The distribution of money income over states the extent of poverty in the United States

Tax incidence most accurately refers to

The distribution of the real burden of a tax

Which would not shift the market demand for labor, ceteris paribus

The wage paid to labor

Which of the following increase labor demand is due to a change in the product demand

Tourism increases in popularity, increasing the demand for workers at tourists resorts

The opportunity cost of working is the

Value of leisure Time that must be given up

The labor supply curve will be negatively sloped if the substitution effect of wages is

Weaker than the income effect of wages

If the government forces a natural monopoly to produce the output where P = MC, the firm

Will incur losses

Which of the following has not been a major factor contributing to the high productivity of labor in the United States

high wage rates


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