As a result of specialization and trade, individuals no longer have to make choices about how to spend their incomes.
Answer the following statement true (T) or false (F)
False
Because of scarcity, market consumers will always have to make choices.
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The supply-side effects of a change in taxes on labor income means that ________ in taxes on labor income shifts the ________
A) an increase; labor supply curve leftward B) a decrease; labor demand curve rightward C) an increase; labor supply curve rightward D) a decrease; labor demand curve leftward E) an increase; labor supply curve leftward and the labor demand curve rightward
You have been hired by the city to determine whether or not an increase in the price of tickets for the mass transit system would raise system revenues. The debate has been heated and the city council seems to be divided. One side argues that in order
to increase revenues from the transit system, prices must be increased. The opposing side argues that a price increase at this time will lower revenues. What assumptions are each side making about the price elasticity of demand, and how might you determine the best course of action?