ECO2023 Micro
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
