In the classical model, a tax on labor supply will
a. decrease the demand for labor, increase the real wage, decrease output, and reduce the price level.
b. decrease the supply of labor, increase real wages, decrease output, and increase the price level.
c. decrease the demand for labor, the real wage, decrease output, and increase the price level.
d. have no effect on the labor market, but reduce output and increase the price level.
e. increase both labor demand and supply, which will increase output and the price level.
B
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Suppose that Brazil is capital abundant and Chile is natural resource abundant. If timber is natural resource intensive and computers are capital intensive, then according to the Stolper-Samuelson Theorem, the incomes of the owners of ________ are likely to rise in Brazil after trade with Chile begins.
A) capital B) labor C) natural resources D) It is impossible to determine which will be favored.
To obtain the slope estimator using the least squares principle, you divide the
A) sample variance of X by the sample variance of Y. B) sample covariance of X and Y by the sample variance of Y. C) sample covariance of X and Y by the sample variance of X. D) sample variance of X by the sample covariance of X and Y.